Post Market views - May 5, 2023 - Reliance Securities

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

Indian equity markets ended lower tracking weak global cues. Nifty was down 1%. Broader markets also ended in red as Nifty Mid Cap and Nifty Small Cap were down by 0.7% and 0.8% respectively. Majority of sectoral indices ended in red. Nifty Pvt Bank (-2.8%) was the major laggard followed by Nifty Fin Service (-2.4%) and Nifty Bank (-2.3%). Nifty Consumer Durable (+1%) was the primary gainer followed by Nifty Auto (+0.4%).

US Stocks fell as US regional banks continued to slide on with the industry's worst crisis since 2008 rumbled on, with California-based lender PacWest exploring a possible sale. The S&P 500 slid 0.7% and the tech-heavy Nasdaq Composite lost 0.5% while Dow Jones was down 0.9%. Shares in PacWest fell more than 50% after the lender said it had been approached by potential partners and investors over a potential sale. The KBW Regional Banking index lost 3.5% in the session. The yield on 10-year treasury note ended higher at 3.38%.

The markets will keep one eye on the quarterly results & the management commentary while also focusing on the US regional banking crisis, US government debt concerns, unemployment data and the crude oil prices. Meanwhile, as expected the FED increased interest rates by 25bps. Indian bond yields have corrected by ~50bps from its peak to 7.02% lowering the borrowing cost for government and corporates. Steep correction in Brent crude prices is an additional tailwind for the Indian economy.

Source : Equity Bulls

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