Post Market Views - June 22, 2023 - Reliance Securities

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

Indian equities ended lower following weak cues in the global markets. Nifty was down 0.5%, while broader markets under-performed the main index as the Nifty Mid Cap and Nifty Small Cap ended 1.1% and 0.8% lower respectively. All of sectoral indices ended in red except Nifty Media which ended flat while Nifty Metal was marginally up by 0.1%. Nifty PSU Bank (-1.7%), Nifty Realty (-0.8%) and Nifty Oil & Gas (-0.8%) were the major laggards.

U.S stocks ended lower led by a sell-off in tech stocks, as investors grew cautious after FED Chair J. Powell warned interest rates would need to rise to bring inflation back to target. The S&P 500 fell 0.5% and the tech-heavy Nasdaq Composite lost 1.2%. The Dow was down 0.3%. Traders have priced in a 72% probability that the Fed will go ahead with another quarter-point increase at the next policy meeting in July. The yield on 10-year treasury remained flat at 3.7%. Meanwhile, in the U.K, CPI inflation remained at 8.7% in May, above analysts' expectations of 8.4%. Core inflation, which excludes volatile food and energy prices, rose again to 7.1% in May, from 6.8% in the previous month.

Late monsoons have sparked worries among traders as this could be a sign of increased retail inflation which eased in May to a 25-month low of 4.25%. Delayed sowing in key agricultural regions of Central India is likely to impact yield. As of 21st June, the monsoon is 33% below normal. However, the IMD has indicated that the Southwest monsoon is expected to revive and progress further in the coming days.

Source : Equity Bulls

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