Post Market views - Jan 12, 2023 - Reliance Securities

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

Indian equities closed slightly lower ahead of the release of inflation data. Nifty fell 0.2% while Nifty Mid Cap fell 0.3% and Nifty Small Cap was largely flat. Sectoral indices ended mixed. Nifty Media (+0.8%) and Nifty IT (+0.4%) were the primary gainers. Nifty Oil & Gas lost the most at 1% followed by Nifty Pvt Bank and Nifty FMCG which were down 0.5% and 0.4% respectively. Meanwhile, India's gold imports in Dec'22 plunged 79% YoY to the lowest level in at least two decades for the month as a rally in local prices near record high dampened demand. The drop in imports could help in bringing down India's trade deficit and support the rupee.

The U.S. equities closed higher on expectation of muted interest-rate hikes. The S&P 500 ticked up 1.3%, the Dow Jones added 0.8%, while Nasdaq Index advanced 1.8%. The market is looking for December inflation print, which the Labor Department will on release Thursday. Economists' survey expects consumer prices to have risen 6.5% annually, down from 7.1% a month earlier. Meanwhile, data from CME group shows that there is a 77% chance that the central bank will raise rates by 25bps . The yield on the benchmark 10-year U.S. Treasury note fell to 3.554%, from 3.618% Tuesday.

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. 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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