Weekly market update, May 12, 2023

India benchmark indices advanced with the Sensex logging a weekly gain of 1.59% and the Nifty advancing 1.36%. Persistent inflow of foreign capital into domestic equities, inline earnings from India Inc supported the market amid mixed global cues during the week ended May 12. Among the broader market indices, the S&P BSE Midcap and S&P Smallcap ended higher by 1.35% and 1.14%, respectively. On the sectoral front, Nifty Auto and Nifty Bank led the pack this week, while Nifty PSU Bank was the worst performer of the week.

Analysts expect that domestic stock markets would be driven by inflation numbers, global trends, and the last batch of Q4 earnings this week. Markets will also react to industrial production data and consumer inflation numbers that were released after market hours on Friday. Retail inflation declined to an 18-month low of 4.7% in April, mainly due to falling prices of vegetables, oils, and fats, and came closer to the Reserve Bank’s target of 4%, according to government data released Friday. India’s industrial production growth slipped to a five-month low of 1.1% in March from 5.8% in February 2023, mainly due to the poor performance of the power and manufacturing sectors, according to official data released on Friday. The recently concluded Karnataka election results may or may not have impact on the market as much of this outcome has already been factored in by investors. Therefore, it is unlikely that we will witness a significant reaction from the market in response to this development.

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