IGI Logo

Domestic Market Update

The Indian equities market continued to rise in August as domestic sentiment improved. A decline in crude oil prices, on expectation of ease in inflation, and net buying by foreign institutional investors contributed to upbeat sentiments. The benchmark equity indices BSE Sensex and NSE Nifty rose 3.4% and 3.5% during the month.The broader market performed in line with the main indices. The Midcap and Smallcap indices rose 3.6 per cent and 3.5 per cent respectively during the month. Indian equities continued to outperform major global equity markets in Aug’22. Even on a YTD basis in 2022, Indian equities have been better performer, a reflection of a strong domestic economy and a robust growth outlook. Moreover, Foreign investors have pumped in a little more than Rs.51,200 crore into the equity markets in August, making it the highest inflow in 20 months. DIIs net sold stock worth Rs.7,068 Crore. On the sectorial indices front, positive momentum was witnessed in the sector like Metal, Energy, Oil & Gas, Auto and Banking, whereas weakness was seen in IT and Pharma sectors. On the results update front, India Inc faced one of its toughest quarters in Q1FY23. A look at the June quarter earnings presents a mixed picture of India Inc. While commodity users bore the brunt of elevated raw material prices, commodity suppliers enjoyed abnormally high profits. Profit margins, however, squeezed across the board as corporates couldn’t pass on the entire increase in costs to consumers. On the macro front, RBI governor Shaktikanta Das has said that macroeconomic conditions have improved on several fronts since August 5 monetary policy. Crude oil prices have averaged $97.4 per barrel in August versus the central bank’s estimate of $105 and the overall softening of commodity prices have altered the assessment of current current account deficit in FY23, which is now expected to remain well within sustainable levels. Going ahead, the domestic market will watch the following events very closely.

* Update on Russia Ukraine war crises

* Crude oil and Rupee movement

* Monsoon progress

Global Market Update

Central banks’ commitment to bring inflation under control, despite the inherent risks to the growth outlook, shook global equity markets in August. The Dow finished August down nearly 4.1%, while the S&P and Nasdaq posted monthly losses of 4.2% and 4.6%, respectively. In the US, even though the economy has already recorded two consecutive quarters of negative economic growth this year, some economic data published in August was quite positive. Fed Chair Jerome Powell reiterated in his Jackson Hole speech, however, that the central bank is committed to curbing inflation and will continue to raise rates even in a recessionary environment. While the economic data in August was mixed, the Fed’s hawkish message amid ongoing risks to the growth outlook hurt both equity and bond markets. Concerns about the impact of the energy crisis in Europe, also weighed on returns.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at www.investmentz.com/disclaimer
SEBI Registration number is INZ000186336

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer