Post Market views - Jan 10, 2023 - Reliance Securities

Mr. Mitul Shah - Head of Research at Reliance Securities

Indian equities closed lower despite positive global cues, dragged by selling in BFSI sector and weak outlook by IT major TCS post its 3QFY23 results. Nifty fell 1% while broader markets out-performed the main indices as Nifty Mid Cap and Nifty Small Cap were down 0.5% and 0.6% respectively. Majority of sectoral indices ended in red except Nifty Auto (+0.3%) and Nifty Healthcare (+0.1%). Nifty PSU Bank lost the most at 2.7% followed by Nifty Fin Service and Nifty Bank which were down 1.4% and 1.3% respectively.

The U.S. equities extended their rally while bond yields fell on hopes that the Federal Reserve might dial back aggressive interest-rate increases. The S&P 500 added 1.4%, the Dow Jones gained 0.8% while Nasdaq rose 2.2%. The yield on 10-year Treasury notes fell to 3.523% from 3.570% on Friday. Earnings season picks up pace with major banks including JPMorgan Chase and Bank of America due to report their results on Friday.

The market is awaiting on the 3QFY23 earnings result for further cues. The inflation in the US, Europe and other economies may have peaked out. Meanwhile, central banks across the globe are pushing ahead with unwinding of their pre-COVID ultra-loose monetary policies, though at a slower pace. While the Indian markets have remained resilient as compared to the global economy, the RBI is expected to continue raising rates in the near term. Moreover, geopolitical issues involving Russia-Ukraine, China-Taiwan etc are threatening to upset markets. India is expected to maintain healthy pace of GDP growth of ~7% over the next few years and would remain among the fastest growing economies globally this decade.

Source : Equity Bulls

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