Post Market views - April 18, 2023 - Reliance Securities

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

Indian equities ended lower led by weakness across sectors despite a positive momentum in global markets. Nifty was down 0.3% while broader markets outperformed the main index as Nifty Mid Cap and Nifty Small Cap were up 0.8% and 0.3% respectively. Sectoral indices ended mixed. Nifty Pharma was the major gainer, up 1.6% followed by Nifty Healthcare and Nifty Realty which were up 1.2% and 1.0% respectively. Nifty Fin Service, Nifty Consumer Durables, Nifty FMCG and Nifty Media were the laggards, which were down in the range of 0.3-0.4%.

The U.S. stocks ended slightly higher as investors digested another round of corporate earnings, while the Dollar and U.S. Treasury yields rose after economic data further cemented expectations of a rate hike from the Federal Reserve in May. Dow Jones, the S&P 500 and the Nasdaq gained 0.3% each. Market expectations for a 25 basis-point hike at the May meeting have risen to more than 86%, up from the 78% on Friday, according to CME's FedWatch Tool. The yield on 10-year Treasury notes was up 8 basis points to 3.602%. China's Q1 GDP data grew 4.5% YoY, higher than expectation of 4.0%.

The 4QFY23 earnings season will pick up pace in the coming weeks. Meanwhile, mixed signals are emerging from the US, Europe and Chinese economic data. Inflation although declining, continues to run high in US and Europe. Initial signs of recession are emerging from the US jobs data and the TCS and Infosys management commentary. In India, meanwhile inflation has eased while growth is steadily picking up pace led by accelerated govt capex and PLI investments. Services exports are strong offsetting the slowdown in the merchandise exports and boosting India's forex reserves. In the coming weeks investors will parse the earnings outcome of the March quarter and closely follow the management commentary for further cues. Brent crude prices continue to remain strong at $85/barrel.

Source : Equity Bulls

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