Mr MituShah, Head Of Research at Reliance Securities.
Indian equities closed lower following weak global cues as market sentiments took a hit due to the European Central Bank's rate hike plans for July and upcoming U.S inflation data. Nifty declined 1.7% while broader markets outperformed compared to the main indices as Nifty Mid-Cap and Nifty-Small Cap fell 0.7% and 1.1% respectively. Sectoral indices ended in red as Nifty Fin Service plunged the most at 2.24%, followed by Nifty IT and Nifty PVT Bank which were down 2.17% and 1.7% respectively. Globally, Russia-Ukraine crisis and resumption of lockdowns in parts of Shanghai, China, to curb the spread of coronavirus, continue to affect markets.
U.S. equities ended lower, recording their biggest declines in more than three weeks as investors awaited inflation data that will help determine the pace of the Federal Reserve's interest-rate hikes this year. Tracking negative cues from ECB's rate hike, higher inflation in Euro zone and indication of further sharper rate hike in next meeting by ECB, global equity markets reacted strongly on downside. This pulled down US markets also. The S&P 500 fell 2.4%, Dow Jones lost 1.9%, while the technology-focused Nasdaq Composite Index declined by 2.7%. 10-year Treasury advanced to 3.041%, from 3.028%. The Fed's June meeting will commence next week, and the central bank is widely expected to raise its key interest rate by a half-percentage point.
Investors are still attempting to gauge the market's trajectory as global markets have also remained volatile due to FED's upcoming policy decisions and the Russia-Ukraine crisis which is affecting supply chain and logistics. The Indian economy's growth moderated to 4.1% in 4QFY22, while the growth rate of real GDP for FY22 has been pegged at 8.7%.The Organisation for Economic Cooperation and Development has joined the World Bank and sharply slashed the growth for India to 6.9% growth in FY23 from 8.1% estimated earlier. This is below the RBI 's estimate of a 7.2% growth. RBI is looking at another phase of coordinated action between fiscal and monetary authorities. After RBI's 50 bps hike, US Fed also expecting rate hike in next week.