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Below is the Weekly Market Outlook 17 September 2022 By Vinod Nair, Head of Research at Geojit Financial Services

"Despite its strong decoupling scenario and encouraging macroeconomic data, domestic bourses succumbed to the global trend of rising bond yields and the dollar index as a result of rate hike fears in the global market. Fears of a recession in the global economy exacerbated selling pressure in IT and pharma stocks. Although the domestic CPI at 7% indicates a rising inflation trend due to increased food prices, core inflation of 5.9% and easing WPI inflation numbers offered some solace. A 15.5% YoY increase in bank credits during August suggests that the economy is recovering rapidly. Mid and small caps are expected to continue their outperformance in the short to medium term as they are trading reasonably well compared to large caps and are at a discount to their historic valuation trend. On the global front, post the release of the US inflation data, which showcased a MoM increase in inflation, the global market has been pricing in the likelihood of a more aggressive policy response from the Fed in its upcoming meeting next week."

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