Post Market views - Nov 3, 2022 - Reliance Securities

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

Domestic equities closed lower in a volatile trading session. Nifty lost 0.2% while Nifty Mid Cap and Nifty Small Cap were up 0.3% and 0.2% respectively. Sectoral indices ended mixed. Nifty IT and Nifty Consumer Durable were the major laggards which fell 1.2% and 0.5% respectively. Nifty PSU Bank and Nifty Realty gained the most at 2.5% and 0.6% respectively. Meanwhile, DIIs sold Rs55bn in past eight trading session, they bought Rs2,310bn during Jan'22 to Jun'22, post which the flow of DII buying has slowed to large extent.

U.S. equities closed lower in volatile trading session, following a move by the Federal Reserve to raise policy rate by 75 bps for a fourth straight time. Fed indicated U.S. central bank unlikely to shift on policy anytime soon. The S&P 500 tumbled 2.5%, Dow Jones erased 1.6%, while Nasdaq shed 3.4%. On the data front, U.S. private payrolls saw an unexpected increase in October. The labor market remains tight despite the Fed's efforts to tamp down growth in its fight against inflation, suggesting aggressive rate hikes may continue.

Federal Reserve raise policy rate by 75bps for a fourth straight time. The 2QFY23 earning season so far witnessed healthy revenue growth but higher inflationary pressure took toll on profitability. Inflation continues to remain high, both in the domestic and the US economy. Any disappointment in earnings or weak management commentary on demand may lead to correction given sharp outperformance of Indian equities. India' is expected to maintain healthy growth pace of ~7% GDP growth over the next few years and be among the fastest growing economies globally this decade. The global companies trying to re structure supply chains leading to China plus one strategy which is likely to continue to favour India's growth prospects in the coming years.

Source : Equity Bulls

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