Market Commentary - Pre-Session
17-Jul-2023 08:31
Key indices could witness muted start today
GIFT Nifty:
The GIFT Nifty futures were currently trading 15.5 points higher, indicating a mildly positive to a muted start to equities on Dalal Street on Monday (July 17).
Economy:
Among the Group of 20 nations, headline inflation seems to have peaked, according to the International Monetary Fund. However, in most of the G20 countries, particularly the advanced economies, core inflation remains well above central banks' targets.
In the fight against inflation there are some early signs of monetary policy transmitting to activity, with bank lending standards tightening in the euro area and the United States. That said, policymakers should avoid 'premature celebrations': lessons from previous inflationary episodes show that easing policy too early can undo progress on inflation,? IMF managing director Kristalina Georgieva reportedly wrote in a Friday note.
The IMF forecasts global growth over the medium-term to fall around 3%, lower than the historical average of 3.8% over 2000 to 2019.
Global markets:
Markets in Asia mostly decline on Monday as investors digested key economic data from China. The Japanese stock market is closed today on account of Marine Day national holiday.
China's economy grew slightly more than expected in the second quarter of 2023, but growth still slowed substantially from the prior quarter as a post-COVID economic recovery ran out of steam.
China's second quarter gross domestic product (GDP) grew 0.8% from the prior quarter, data from the National Bureau of Statistics showed on Monday. The reading was slightly above expectations for growth of 0.5%, but slowed substantially from the 2.2% seen in the prior quarter.
Hong Kong markets will likely be closed all Monday due to a warning issued for Typhoon Talim. The Hong Kong Observatory expects storm signal No. 8 to remain in force until at least 4pm.
The Hong Kong Exchange usually cancels the morning trading sessions if the typhoon signal is No. 8 or above, and all trading sessions for the day will be cancelled if signal No. 8 or above remains in force by noon.
Singapore's non-oil domestic exports fell 15.5% year on year in June, marking the ninth straight month that such exports have remained in contraction territory.
This was a deeper fall than the 14.8% drop recorded in May, but slightly less than market expectations of a 15.8% decline. The fall in non-oil domestic exports were due to weaker exports to Malaysia, Indonesia and South Korea, although exports to Hong Kong and China rose.
Meanwhile, the U.S. markets were mixed on Friday, with the Dow Jones Industrial Average reaching its highest level since March as strong earnings results from some of the biggest banks and companies kicked off earnings season.
However, the S&P 500 dropped 0.10%, and the Nasdaq Composite declined 0.18%, but both indexes touched their highest intraday levels since April 2022.
Domestic markets:
Back home, the domestic equity indices closed with significant gains on Friday, with the Nifty surpassing the 19,550 mark, driven by positive global cues. The barometer S&P BSE Sensex advanced 502.01 points or 0.77% to 66,060.90. The Nifty 50 index gained 150.75 points or 0.78% to 19,564.50. Both the indices attained record closing high levels.
Foreign portfolio investors (FPIs) bought shares worth Rs 2,636.43 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 772.45 crore in the Indian equity market on 14 July 2023, provisional data showed.
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