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Below Quote on Weekly market outlook 19 August 2023 By Vinod Nair, Head of Research at Geojit Financial Services

Indian indices encountered a week of vulnerability due to adverse global and domestic cues, accompanied by a shift towards safer assets by investors like the USD. Discouraging domestic industrial production, negative wholesale inflation, and elevated CPI inflation contributed to market volatility. Additional strains emerged from stronger-than-expected US retail sales data; adding to Fed rate hike fears, concerns about US bank rating downgrades, and a sudden Chinese central bank rate cut hindered recovery and sustained selling pressure. Escalating US bond yields are predicted to restrict foreign investments in India, further impacting market dynamics. With moderate core inflation & transitory July retail CPI data, the market did not foresee a rate hike. The metal sector bore the brunt this week due to sluggish industrial data and concerns about Chinese demand. Investor sentiment remains subdued due to the high volatility of the global currency market, leading to a high depreciation of EM currencies, which affects the performance of equities.

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