Daily Market Commentary - August 5, 2022 - Bonanza Portfolio

Mr. Vishal Wagh, Research Head, BONANZA PORTFOLIO LTD

Indian indices open on a positive note today, with Sensex at 58435.82, and the Nifty at 17424.70. At the time of closing, Sensex was up by 89.13 points or 0.15% at 58,387.93 & nifty was up by 15.50 points or 0.09% at 17,397.50.

During the day, both the Indian indices end flat. India's rate-setting panel hiked the key lending rate, the repo rate, by 50 basis points (bps), taking the policy rate back to the late 2019 levels. With the latest hike from the six-member MPC, the repo rate now stands at 5.4%. The real GDP growth projection for 2022-23 is retained at 7.2%, with Q1 at 16.2%; Q2 at 6.2%; Q3 at 4.1%; and Q4 at 4.0%, and risks broadly balanced. RBI projects the real GDP growth for Q1FY24 at 6.7%.

Benchmark 10-year government bond yield jumped 10bps to 7.25% as the RBI Governor said further withdrawal of monetary accommodation is warranted due to elevated inflation. Inflation is expected to remain above the central bank's 6% threshold in the Q2 and Q3 of FY23, for which the MPC stressed that sustained high inflation could destabilize inflation expectations and harm growth in the medium.

The Bank of England raised interest rates by the most in 27 years on Thursday, despite warning a long recession is on its way. Reeling from a surge in energy prices caused by Russia's invasion of Ukraine, the BoE's Monetary Policy Committee voted 8-1 for a 0.5% point rise in Bank Rate to 1.75% - its highest level since late 2008 - from 1.25%. Oil prices extended losses on Friday, after hitting their lowest since before Russia's February invasion of Ukraine, as the market fretted over the impact of inflation on global economic growth and demand. On the sectoral front, power and auto indices shed over a percent each while buying was seen in financial and IT.

Nifty 50 top gainers are Shree Cement, Ultra Tech Cement, ICICI Bank, UPL & Bharti Airtel while Hindalco, Britannia, M&M, Eicher Motors & Reliance were among the top losers.

Source : Equity Bulls

Keywords

DailyMarketCommentary BonanzaPortfolio Nifty Sensex