Global developments pressurising domestic markets
Global equity markets reacted to the crisis in US and European banks. Indian markets were under pressure from these global developments. Accordingly, key domestic benchmark index Sensex-30 were down during the week.
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Mumbai: Global equity markets reacted to the crisis in US and European banks. Indian markets were under pressure from these global developments. Accordingly, key domestic benchmark index Sensex-30 were down during the week. Broader indices including BSE Midcap, BSE Small-cap and majority of the sectoral indices too posted negative returns in this week.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, says, “On the economy front, India’s February CPI inflation moderated to 6.44 per cent and trade deficit remained in check with marginal increases (over January) in exports and imports. Crude oil prices corrected sharply this week amid the recent banking crisis.”
The yield on the 10-year US Treasury was lower as compared with last week. Meanwhile, the European Central Bank raised interest rates by 50 bps and continued with its policy tightening measures. Market participants will keenly watch-out for next week’s Federal Reserve policy decision.
Amol Athawale, Technical Analyst (DVP), Kotak Securities, says, “What we are seeing is a relief rally backed by strong positive global cues as there are expectations that the US Fed may not take aggressive rate hike steps to tame inflation.”
Some of the concerns over the falling financial health of the US banking industry have also subsided, which further boosted the market sentiment. Falling crude oil prices and recovery in the metal space on hopes of revival in the Chinese economy is also providing some support to the struggling markets.
