Post-market views - Aug 16, 2023 - Reliance Securities

Mr. Vikas Jain, Senior Research Analyst at Reliance Securities

Indian equities ended higher despite weak cues in the global markets. The Nifty was up 0.2% while Nifty Mid Cap and Nifty Small Cap ended 0.1% and 0.6% higher respectively. Sectoral indices ended mixed. Nifty Media (+1.2%) and Nifty Reality (+1.1%) were the primary gainers. Nifty Metal (-0.9%) and Nifty Pvt Bank (-0.5%) were the major laggards.

US markets declined over 1% to close 1-month low followed by European and Asian markets dropping 1% each. Moreover, expectation of the US Fed to hike interest rate in the September policy meeting and concern of weakness in the China economy growth dampen the global market sentiment.

Meanwhile, the People's Bank of China unexpectedly lowered interest rates by 15bps to bolster an economy that's facing fresh risks, stoking concerns about the impact on global growth. As a result, the US Dollar Index surged to 1-month high and 30-year bond yield spiked to 1-year high.

Gift Nifty slipped nearly 100 points or 0.5% while US Futures are trading flat. Concern of 15-month high domestic July inflation and continued FIIs selling may have a negative impact on domestic bourses. FIIs were net sellers of nearly Rs10000cr during the month of August.

CPI Inflation Spikes To 15-Month High - The Consumer Price Index-for the month July reported at 15-month high of 7.44% compared with 4.87% in June while expectation was 6.50%, largely led by food prices (Tomato price) . CPI Inflation in July breached the upper end of the central bank's 2%-6% target range in July for the first time in five months and by a wide margin.

July WPI-based inflation comes at -1.36% as food prices skyrocket - Wholesale price index (WPI)-based inflation in July came in at (-)1.36 per cent, significantly high than (-)4.12 per cent reported in June on account of the rising price of food.