Post Market views - April 10, 2023 - Reliance Securities

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

Indian equities ended slightly higher with mixed cues in global markets. Nifty was up 0.1% while broader markets out-performed the main indices as Nifty Mid Cap and Nifty Small Cap were up 0.4% and 0.3% respectively. Sectoral indices ended mixed. Nifty Realty was the major gainer, up 4.3% followed by Nifty Auto which was up 1.2%. Nifty PSU bank (-0.6%) and Nifty Bank (-0.5%) were the major laggards. Meanwhile, private weather forecaster Skymet has predicted "below normal" monsoon in India in 2023 on account of El Nino conditions. The monsoon rainfall is expected at 94%, with an error margin of 5% of the long period average (LPA) of 868.6mm. Inadequate rainfall in certain parts of the country is likely to impact agriculture which primarily depends on the monsoon rains.

The U.S. stocks ended the week slightly higher on Thursday. The S&P 500 climbed 0.4% while the Dow Jones ended flat, up 0.1%. The tech-heavy rose 0.8%. The U.S. markets were shut on Friday on account of Good Friday. For the week, the S&P 500 edged down 0.1%, while the Dow gained 0.6% and the Nasdaq fell 1.1%. Thursday's jobless claims data provided the latest evidence that the labor market might finally be cooling. Claims totaled 228,000 last week on a seasonally adjusted basis. That was down from 246,000 the previous week. Investors remain optimistic that recent strains in the banking sector won't lead to a major crisis and are also cheered by signs that the Federal Reserve may be nearly done raising interest rates.

Investors will now await the earnings outcome of the March quarter which will start trickling in from this week. The 4QFY23 earnings season begins this week with IT bellweather TCS due to report on Wednesday followed by Infosys on Thursday. Investors will closely watch out for management commentary on the demand environment for Indian IT services in the backdrop of the banking crisis and the slowing economic environment. The March inflation and the February IIP data will also come out this week. While the Indian economy still has some macroeconomic bottlenecks, overall it has been resilient despite the turbulent global environment. However, impending recession in the US, higher crude prices along with the prospect of a below normal monsoon could act as headwinds for the Indian markets.

Source : Equity Bulls

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