Post-Market Views - July 3, 2023 - Reliance Securities

Mr. Mitul Shah - Head of Research at Reliance Securities

Indian equities started of the week on a positive note amid upward trend in the global markets as the Nifty was up 0.7%. Broader markets ended in green as Nifty Mid Cap and Nifty Small Cap were up 0.3% and 1.2% respectively. Majority of sectoral indices ended in green for the week. Nifty PSU Bank (+3.6%), Nifty Oil & Gas (+2.3%) and Nifty FMCG (+1.1%) were the major gainers. Nifty Pharma and Nifty Healthcare were the major laggards which were down 1.1% and 0.9% respectively.

US stocks climbed Friday, ending a strong first half on a high note amid more signs of cooling from the Federal Reserve's preferred inflation gauge. The S&P 500 rose 1.2%, while the Dow Jones Industrial Average rose over 300 points, or just under 1%. The Nasdaq Composite added 1.5%. The Nasdaq is up more than 30% since the start of the year. The benchmark S&P 500 has gained around 16%, while the Dow has put up a more modest 4% gain. For the week the S&P 500, DJIA and Nasdaq were up 2.4%, 2% and 2.2% respectively. The Fed's preferred inflation index showed prices rose 3.8% in May on a YoY basis, down from a 4.4% YoY jump in April. From April to May, prices ticked up just 0.1%. An upward revision to first-quarter GDP showed the US economy is a lot stronger than Wall Street thought. Growing faith in that strength has helped drive this year's rally in stocks, even though that resilience likely means rates will stay higher for longer.

The rate pause decision by the Reserve Bank of India and US Federal Reserve, in view of declining inflation, breathed new life into markets. Investor interest was reclaimed by a revival of the monsoon and positive sentiment in global markets. European markets joined the global stock market rally but with trepidation as investors kept a close eye on central bank commentary to continue the fight against inflation. In the coming week, data points on India's manufacturing and services sector will be released that will provide further cues.

Source : Equity Bulls

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