Post Market views - Nov 30, 2022 - Reliance Securities

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

Domestic equities closed higher led by broad-based gains across sectors, despite weak global markets. The Nifty gained 0.8%, while Nifty Mid Cap and Nifty Small Cap rose 1% and 0.6% respectively. All sectoral indices ended in green except Nifty PSU Bank (-1.4%). Nifty Metal gained the most at 1.8% followed by Nifty Auto and Nifty Reality which were up by 1.7% and 1.5% respectively. The free trade agreement between India and Australia will come into force from 29 Dec'22, a move which will help in almost doubling the bilateral commerce to $45-50bn in ~5 years. India's GDP to grow by 6.2% YoY in 2QFY23, down from growth of 13.5% YoY in 1QFY23 on low base.

U.S. equities closed lower following weak economic data and ongoing protest in China. The S&P 500 fell 0.3%, the Nasdaq Composite lost 0.7%, while the Dow Jones was down 0.1%. The yield on the benchmark 10-year Treasury note edged up to 3.742% from 3.701% Monday. Meanwhile, National Home Price Index fell in September from last month, its third consecutive drop due to rising interest rates. Moreover, Mr. Powell is set to speak Wednesday at the Brookings Institution, the last major scheduled speech for FED officials before the next rate-setting meeting on Dec. 13-14.

The recent labour data and relatively lower inflation print will reinforce expectations for a smaller 50 bps Fed rate hike on Dec. 14 and perhaps signal a further slowing in the pace of rate increases early next year. The run-up to the exercise for the Budget is building up with job creation and a step-up in government capex, being the primary focus. We expect a recovery in the coming quarters led by softening of commodity prices and monetary easing by central banks which is likely to boost demand going ahead. The movement of rupee, FII flow and crude oil prices will dictate trend in the near term, while volatility is likely to remain due to endless Russia-Ukraine crisis and new COVID cases in China.

Source : Equity Bulls

Keywords

PostMarketViews Nifty Sensex RelianceSecurities