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Below is on Weekly Market Outlook 05 May 2023 By Vinod Nair, Head of Research at Geojit Financial Services

The domestic market continued to be positive at the beginning of the week, aided by strong FII inflow and favourable domestic macroeconomic data. The manufacturing PMI and the GST collection in April were better due to an increase in new business, a strong pickup in consumer demand, and improved supply chain conditions. As of today, half of the Nifty 50 companies announced their results, and the earnings growth of those stocks were below estimates, mainly due to weak performance by IT, metal, and cement stocks. While the results for banks, financials, and auto were better than estimates.

However, volatility emerged in the global market due to the FED's concerns over elevated inflation despite softening its language on future rate hikes and the ECB's hawkish policy action. We expect continued foreign inflows and favourable domestic macroeconomic conditions to protect the downside. The Q4FY23 earnings estimate of the Nifty is at 11% YoY; therefore, the next set of results is likely to be better and will support the investor sentiment. In the week ahead, the release of US and Indian CPI inflation data will be keenly watched by the market to get a direction.

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