Post Market View - April 13, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equities ended in red, moving in tandem with weak global markets. Russia-Ukraine war and supply disruptions due to rising COVID infections in China, continue to be on investor's radar while they prepare for the quarterly earnings season. Nifty declined 0.3%. Nifty Midcap fell 0.1% while Nifty SmallCap was up 0.2%. Sectoral indices ended mixed with Nifty FMCG and Nifty Metal gaining the most at 0.7% and 0.6% respectively, while Nifty PVT Bank, Nifty Fin Service and Nifty Auto were the major laggards which dipped 0.87%, 0.84% and 0.8% respectively.

U.S equities closed lower after Federal Reserve Governor, reiterated the need for the central bank to curb a decade-high inflation, as the FED prepares for its impending monetary policy tightening. The Dow Jones fell 0.26%, the S&P 500 lost 0.34%, while the Nasdaq dropped 0.3%. The 10-year Treasury yield fell 5.5 basis points to 2.725%. U.S. crude oil prices jumped 6.7% to $100.6 a barrel. Moreover, supply chain disruptions and impact on food and energy prices due to the Russia-Ukraine crisis, continue to negatively impact the market sentiment.

Markets continue to face challenges, as the Russia-Ukraine war has stimulated a sharp rise in energy prices across the world and aggravated the supply chain and logistics issues. In addition, FED is preparing to take a more rigid monetary policy stance and shrink its balance sheet in an attempt to curb inflation. On the other hand, India's central bank has kept the repo-rates unchanged at 4% despite fears of rising inflationary pressures, whilst also downgrading the growth forecasts to 7.2% for FY23. Meanwhile, China's largest city, Shanghai, is facing food shortages amid raging COVID outbreak. Undoubtedly, the unprecedented economic damage due to the Russia-Ukraine crisis is likely to dictate the near-term market sentiment.

Source : Equity Bulls

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