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Global equity markets are breathing easy with the key commodity prices, metals, crude oil and others, cooling off, said ICICI Securities in a report.

"The recent cool off in key commodity prices viz. metals, crude among others, comes as a breather for global equity markets, which are currently wary of ongoing geopolitical issues and interest rate hikes by central banks to control inflation," the report notes.

Management commentary is upbeat on demand prospects and recovery in margin profile amid muted corporate earnings for Q1FY23, which witnessed low single digit QoQ growth in topline and double digit bottomline decline with pressure on gross margins.

Major disappointment came in from the oil & gas sector wherein marketing margins came in lower than estimated.

According to the ICICI Securities report, capital goods, metals & mining and pharma space surprised on the positive side.

Domestically, with a capex cycle revival on the anvil (public + private) coupled with strong consumer demand across most categories (passenger vehicles, retail, etc), Indian markets witnessed a smart recovery and were up about 18 per cent from recent lows.

According to the report, the present market offers an attractive risk-reward play to build a long term portfolio of quality companies, which have lean balance sheets, are capital efficient in nature and have growth longevity.