Weekly market update, Dec 02, 2022

The Indian benchmark indices witnessed a strong rally this week with Sensex and Nifty 50 hitting a fresh historic high, and up by around 1% each, driven by a slide in crude oil, robust GDP data, and Fed’s dovish stance. Further, Markets went up on the back of robust capital inflows as market participants remained confident of the India growth story which can be attributed to India’s macroeconomic stability and its structural growth drivers. The broader indices outperformed their larger peers, with the mid-cap gauge gaining 2.84% and the small-cap measure gaining 2.43%. On the sectoral front, all the sectoral indices closed in the green. S&P BSE Realty rose the most by 4.20% followed by S&P BSE Metal which rose 3.36%.

The Indian economy’s growth of 6.3% in Q2 was in line with the RBI’s forecast, while the manufacturing PMI rose to 55.7 in November,22. On the contrary, auto stocks came in lower than expected due to weaker exports and sequential de-stocking. In the coming week, RBI’s monetary policy outcome will play a major role in setting the tone for domestic equities. With inflation easing in October, expectations of 35 basis points instead of the fourth 50 basis points hike in December policy is on cards. On the global front, given the underlying high valuation, Fed policy, and stringent Chinese COVID restrictions, the market will remain highly sensitive in the coming weeks.

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