Post Market views - April 3, 2023 - Reliance Securities

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

Indian equities ended slightly higher led by broad-based gains, amid positive momentum in India's manufacturing activity. Nifty was up 0.2% while broader markets out-performed the main index with Nifty Mid Cap and Nifty Small Cap gaining 0.4% and 0.7% respectively. Majority of sectoral indices ended in green. Nifty FMCG, Nifty Metal and Nifty Oil & Gas were the major laggards which dipped 0.4% each. Nifty Auto was the major gainer, up 1.5% on back of good March volume numbers, followed by Nifty PSU Bank and Nifty Realty which were up by 1.1% and 0.9% respectively. The manufacturing PMI for India compiled by S&P Global increased to 56.4 in March from February's 55.3, remaining above the 50-mark for a 21st straight month.

The U.S. stocks ended the week on a high, after the Fed's preferred inflation gauge showed a lower-than-expected increase in prices. The core Personal Consumption Expenditures index, which excludes energy and food costs, rose 0.3% in February, less than the 0.4% expected by economists. This lifted hopes of the Fed pausing its rate hikes ahead of previously anticipated. The S&P 500 ended 1.4% higher, the Dow Jones rallied 1.3%, and the tech-heavy Nasdaq surged 1.7%. The 10-year yield fell to 3.47%. Brent crude prices surged 5.5% to $84.1/barrel as OPEC+ producers led by Saudi Arabia and Russia unexpectedly cut production further to stabilize markets hit by fears of slowing economic growth. The OPEC+ will cut production by about 1.16 million barrels per day (bpd).

This week is a holiday shortened week with only 3 trading days, but markets will have plenty of cues to look forward to. As FY23 ended, investors await the earnings outcome of the March quarter. Markets will mull over the PMI data in India and globally, the jobs data in the US as well as the RBI's rate decision and commentary on growth and inflation. Higher crude prices with Brent crossing $84/barrel along with the prospect of above normal temperatures in 1QFY24 followed by below normal monsoon could act as headwinds for the Indian markets. The Indian markets will remain shut tomorrow on the occasion of Mahavir Jayanti.

Source : Equity Bulls

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