Post Market Views - June 2, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equities ended higher after lower opening with Nifty gaining 0.64%, while broader markets underperformed compared to the main indices as Nifty Mid-Cap and Nifty-Small Cap rose by 0.5% and 0.6% respectively. Most sectoral indices ended in green as Nifty IT witnessed the highest gain of 1.8%, followed by Nifty Metal which was up 1.14%. Nifty Auto was the major laggard which declined 0.6%.

U.S. equities closed lower after a volatile trading session. The S&P 500 lost 0.7%, the Dow Jones fell 0.5%, while the technology-focused Nasdaq declined 0.7%. The 10-year U.S. Treasury note advanced to 2.930%, from 2.842%. European Union leaders' plan to impose an oil embargo on Russia and a ban on insuring ships that carry Russian oil. Some OPEC countries are also aiming to suspend Russia's participation in an oil-production deal. Moreover, investors remain wary about the pace of the Federal Reserve's interest-rate hike.

The Indian economy's growth moderated to 4.1% in 4QFY22 while for FY22 GDP growth is at 8.7%. RBI is looking at another phase of coordinated action between fiscal and monetary authorities. More rate hikes are on the way. And all eyes are on RBI and the US Fed, which are meeting this month, as the economic landscape goes through a furious churn. The Indian government has rolled out a string of measures to keep prices in control by reducing petrol and diesel prices. 4QFY22 reported strong performance despite inflationary pressure. Revenue of BSE500 for 4QFY22 grew by 22% YoY while PAT grew by 25% YoY. The primary focus will be on central banks' policy measures to stabilize inflation. Changes in oil prices and amendments to import and export duties might play a role in assessing the market's trajectory. However, the continued selling by FIIs and plunging rupee are likely to have economic implications in the near term. Globally, the Russia-Ukraine crisis and supply chain disruptions continue to impact global and Indian equities.

Source : Equity Bulls

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