Post Market views - Oct 7, 2022 - Reliance Securities

Mr. Mitul Shah - Head of Research at Reliance Securities.

Indian equities closed lower led by weakness in global markets. The Nifty fell 0.1%, Nifty Mid Cap plunged 0.2% and Nifty Small Cap was up 0.2%. Most sectoral indices ended in red. Nifty Oil & Gas was the major laggard, which dipped 0.7%, followed by Nifty FMCG which was down 0.6%. Nifty Consumer Durables (+1.3%) and Nifty Media (+0.4%) were the primary gainers. The World Bank slashed India's real GDP growth forecast for FY23 to 6.5% from 7.5% it had projected earlier in June.

U.S. equities closed lower following weak economic data as S&P 500 fell 1%, Dow Jones declined by 1%, while Nasdaq slipped 0.7%. The yield on 10-year Treasury rose to 3.823%, from 3.757% on Wednesday. Meanwhile, initial jobless-claims rose to 219,000 for the week ended Oct. 1, higher than the expectation of 203,000. Additionally, the market mulled over agreement by the OPEC and its Russia-led allies to slash output by 2mn barrels of oil a day⁠, a decision that could exacerbate inflation and slow economic growth.

The RBI raised its key repo rate by 50 bps to curb rising inflation. Central banks across the world are in the midst of inflation firefighting and many are rapidly raising their policy rates. RBI may have to keep up with the monetary policy tightening. Further rate hike of 35 bps is expected in Dec'22 followed by a pause with the RBI assessing US Fed actions, and impact of past rate hikes on domestic growth and inflation. The market given positive response to the commentary on India's growth impulses and projection of 7% GDP growth with 6.7% inflation for FY23. Indian currencies remain strong vs other markets, all currencies have depreciated against the USD.

Source : Equity Bulls

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