Mr Mitul Shah, Head Of Research at Reliance Securities.
Domestic equities ended in red despite starting higher amid positive global cues. Nifty declined 0.3%, while broader markets under-performed compared to the main indices as Nifty Mid-Cap and Nifty-Small Cap tumbled 1.6% and 0.9% respectively. All sectoral indices ended in red except Nifty IT which was up 0.4%. Nifty Auto plunged the most at 1.8%, followed by Nifty Media and Nifty PSU Bank which were down 1.5% and 1.4% respectively. Meanwhile the recent export restriction on wheat and sugar have dampened the consumer sentiments by 5.9% in urban areas and a sharp 11.4% in rural areas. Moreover, news flow on the Russia-Ukraine crisis and surging COVID cases in China continue to impact markets.
U.S. equities closed higher with S&P 500 gaining 1.8%. The tech-focused Nasdaq added 2.7% while the Dow Jones rose 1.3%. 10-year U.S. Treasury note declined to 2.914%, snapping a two-day winning streak. Moreover, the ADP employment report showed that the private sector added 128,000 jobs in May, much lower than the 299,000 that economists had expected earlier. Additionally, crude prices gained after the OPEC and non-OPEC oil producers led by Russia agreed at a meeting for a bigger-than-expected oil-production increase.
The GST revenue for the month of May stood at Rs1,400bn, up 44% YoY. GST collection crosses Rs1,400bn mark 4th time since inception of GST. 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.