Post Market views - April 13, 2023 - Reliance Securities

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

Indian equities ended slightly higher ahead of quarterly results from Infosys. Nifty recovered from the opening lows and ended flat (+0.1%) while broader markets also ended in the green as Nifty Mid Cap and Nifty Small Cap were up 0.2% and 0.3% respectively. Sectoral indices ended mixed. Nifty PSU Bank was the major gainer, up 1.5% followed by Nifty Bank which was up 1.4%. Nifty IT tumbled 2.2% post weak commentary from TCS. Nifty Pharma (-0.8%) was the other major laggard.

U.S. stocks slipped, giving up early gains after the release of the Fed minutes. The S&P 500 fell 0.4% while the Nasdaq lost 0.9%. The Dow Jones gave up 0.1%. Data showed inflation eased to its lowest level in nearly two years in March as the CPI rose 5% last month. Investors believe that this should keep the Federal Reserve on course to finish its interest-rate increase campaign within the year. The yield on the 10-year U.S. Treasury note fell to 3.419% from 3.433% on Tuesday. U.S. headline inflation slowed by more than expected in March to 5.0%, but the core CPI closely watched by the Federal Reserve accelerated slightly to 5.6% following a rise in shelter costs. Meanwhile the US Fed minutes suggested that the US economy is likely to fall into a recession later this year as a result of the banking crisis in the country.

Investors will now focus on the earnings outcome of the March quarter. Infosys is due to report its 4QFY23 result today. 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. India's March CPI eased further to 5.66% YoY as food inflation moderated. Meanwhile, India's IIP in February rose 5.6% YoY. Brent crude prices surged overnight, now above the $87/barrel mark. The Indian market will remain shut tomorrow on the occasion of Ambedkar Jayanti.

Source : Equity Bulls

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