Post Market views - Nov 7, 2022 - Reliance Securities

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

Domestic equities closed higher with Nifty gaining 0.5%. The broader markets out-performed the main indices as Nifty Mid Cap and Nifty Small Cap climbed 0.9% and 0.7% respectively. Most of the sectoral indices ended in green. Nifty PSU Bank gained the most at 4.5%, followed by Nifty Metal and Nifty Auto which were up 1.4% and 1.3% respectively. Nifty Pharma (-1.5%) and Nifty Healthcare (-1.4%) were the primary laggards.

U.S. equities closed higher on Friday but still finished the week with losses with continued interest-rate increases from the Federal Reserve. All three indices were in negative territory for the week, with the Dow snapping a four-week winning streak. Dow Jones fell 1.4%, the S&P 500 dropped 3.4% and Nasdaq tumbled 5.7% for the week. The yield on the benchmark 10-year U.S. Treasury note rose to 4.157% Friday from 4.123% on Thursday. The jobs report Friday left intact the picture of a strong U.S. labor market. Employers added a seasonally adjusted 261,000 jobs in October, while wage gains ticked up from the previous month.

The 2QFY23 earning season so far witnessed healthy revenue growth but higher inflationary pressure has impacted profitability. For 260/BSE500 companies, revenue grew by 28% YoY, EBITDA increased by 8% YoY while PAT was down 7% YoY. The latest 75 bps rate hike by the US Federal Reserve for the fourth straight time, suggests that central banks are still attempting to rein in inflation. We expect markets to remain volatile in the near term on account of deterioration in global macros and uncertainties prevailing in western economies due to high inflation. We believe that in long term, India would see a multi-year economic up-cycle led by strong macros, and various government initiatives.

Source : Equity Bulls

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