Post Market views - June 12, 2023 - Reliance Securities

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

Indian equities started the week on a positive note while markets await the CPI and IIP figures. Nifty was up 0.2%. Broader markets outperformance continued with the Nifty Mid Cap and Nifty Small Cap up by 0.6% and 0.9% respectively. Majority of the sectoral indices ended in green. Nifty IT (+1.5%), Nifty Realty (+1.4%) and Nifty Media (+1.1%) were the major gainers. Nifty Fin Service (-0.1%) was the primary laggard while Nifty PVT Bank, Nifty Pharma and Nifty Healthcare ended flat.

US stocks wobbled on Friday as traders largely stayed on the sidelines ahead of the Federal Reserve's policy meeting this week. The S&P 500 ended the day up 0.1%, having reached a 10-month high in intraday trading. The index witnessed the lowest daily trading volume since October 2022. The tech-heavy Nasdaq Composite gained 0.2%. The Dow was up 0.1%. On a weekly basis, the S&P 500 rose 0.4% to record its fourth consecutive weekly winning streak, while the Nasdaq Composite was up 0.2% for its seventh consecutive week of gains. The Dow was up 0.3% for the week. The Fed is expected to hold off on raising interest rates, marking the first pause in its 14-month endeavour to tame inflation. Expectations of a pause in June gained steam after US unemployment data on Thursday pointed to a cooling labour market.

Markets will draw cues from the upcoming FED's policy meeting and US & India's May inflation print. Last week, the RBI monetary policy committee held the repo rate unchanged at 6.5%. It also remained focused on withdrawal of accommodation. RBI revised down the inflation forecast for FY24 from 5.2% in April policy to 5.1%, amid recent dips in inflation readings. Inflation print is expected to remain above 4% target for this fiscal year while there are upside risks to food and commodity prices from potential supply cuts. The monsoon has arrived in India and is making good progress in the rest of the country.

Source : Equity Bulls

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