Light At The End Of A Dark Tunnel
It’s been a difficult year for the markets; the Sensex has fallen roughly 10 per cent so far this year. The RBI may manage inflation, but not before several rate increases.
On the domestic front, the BSE Sensex rose by 2.48 per cent to 54,481.84 in the past 15 days, recovering losses, tracking easing fears about global inflation and aggressive monetary tightening from major central banks. The Indian currency has depreciated as opposed to the dollar to all-time low in the last fortnight. The government bond yield also saw a slight decrease and reached 7.3 per cent, denting the risk appetite of investors. The S and P BSE Power index has gained 5.75 per cent to quote at 4,199.77 points. Among the other constituents of the index, Tata Power jumped 5.25 per cent and Adani Green increased 0.17 per cent during the fortnight.
The realty sector also witnessed a surge of 6.40 per cent with a closing of 3,274.71 points on July 8. This was as a result of many companies resuming work from office and the increasing demand for office space. The metal sector increased by 2.56 per cent to a mark of 15,950.39 due to dampened production in China on account of the rising virus level and global economic slowdown. The automotive industries have seen a great recovery of 4.17 per cent amongst all the other sectors. The push was mainly due to the green revolution in the sector.
Revenues from automotive ancillaries are anticipated to increase 8–10 per cent in 2022–2023 as a result of consistent demand and potential supply chain problems relaxing in the second half of the year. The oil and gas sector remained flat and only gained 0.49 per cent in the last fortnight. Despite increase in the refining capacity, the OMCs continued to stay under pressure due to mounting losses related to marketing and continuing freeze on domestic retail prices. The expected loss on gasoline and diesel per litre has increased to Rs10.5 and Rs12.5, correspondingly.
The FMCG sector has picked up pace with sales of snacks and stationery picking up in the wake of children returning to school. However, inflation continues to remain the key component that can be monitored and poses a challenge to the companies. The sector rose by 6.95 per cent to a level of 14,868.27. The healthcare sector has also improved by 2.01 percent to trade at the level of 22,160.42. Most of the healthcare stocks are trading on the higher side as a result of good Quarterly Results. Meanwhile, IT has exhibited a negative 0.29 per cent return over the last 15 days and stood at a level of 28,798.05 points. The banking sector has improved its rating in this quarter.
Rating agency Moody’s has said that Indian banks are likely to observe a surge in margins in FY23. The banking index was also seen inching upwards by 4.01 per cent to a level of 40,445.58 during the last 15 days.
Foreign institutional investors (FIIs) sold shares worth Rs9,055.09 crore while domestic institutional investors (DIIs) were net buyers to the tune of Rs9,836.80 crore in the Indian equity market in the past 15 days. WTI crude prices cooled off from a record high to USD 102. Gold price appreciated by 0.88 p Q Qer cent in the last 15 days to trade at Rs50,800 for 10 grams of 24 carat gold.
