Daily Market Commentary - July 3, 2023 - Bonanza Portfolio

Mr. Rajesh Sinha, Sr. Research Analyst, BONANZA PORTFOLIO LTD

Sensex was up by 282.85 points or 0.44 % at 65,001.41, and Nifty was up by 81.30 points or 0.42 % at 19,270.30 at closing, Sensex was up by 486.49 points or 0.75% at 65,205.05, and Nifty was up by 133.50 points or 0.70% at 19,322.50.

Ongoing rally in global stock markets is primarily driven by the surprising and unexpected strength of the U.S. economy (2% GDP growth in Q1 23), in spite of the savage 500bp rate hike by the Fed. Global markets which had discounted a US recession by mid 2023 have been proved wrong and the markets are now compensating for the excessive pessimistic discounting in 2022.

Due to robust profit growth potential and increased demand from domestic and global investors, Indian shares remain appealing despite high relative valuations. The premium over the historical average implies increased optimism about medium-term growth. Markets will be impacted in the near term by events such as the Fed's monetary policy stance, corporate earnings, and election results.

Oil prices fell today as concerns about a global economic slowdown and possible further interest rate hikes from the U.S. Federal Reserve weighed on prices, offsetting forecasts of tighter supplies amid OPEC+ cuts.Crude oil prices are drifting higher amid the expectation of OPEC's additional cuts coming into the picture from July to have a deeper impact on the oil market balance but the factory activity in Asia is pointing to further slowdown as June month record contraction in major Asian nations.

Outlook for the Indian economy is improving. India has the best growth- inflation balance among the large economies of the world: growth is resilient and inflation is falling. Leading indicators like GST collections, private capex, credit growth and PMI indicate the growth momentum to sustain.

Nifty gainers were Grasim Industries, ITC, BPCL, Reliance Industries and Bajaj Finance while loser were Bajaj Auto, Power Grid Corp, Sun Pharma, Cipla and Dr Reddy's Laboratories.

Source : Equity Bulls

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