RBIs accommodative stance boosted market sentiment, however, sharp rise in UST yields & geo-political tension caused sell-off in domestic equities. US inflation touched 4-decade highs of 7.5% which spooked investors sentiment and leaves the room for Fed to hike rates as much as by 50bps in the coming policy-meeting March 2022. Fed minutes which are due in the coming week should give more insights on pace of rate hikes. Industrial production in India increased 0.4% (Y-o-Y) in December 2021 compared to 1.3% market expectation.
Investors will watch out for developments in Russia & Ukraine matter, FOMC minutes and Japan�s GDP growth & inflation data. Domestic investors will look out for CPI & WPI data.
FIIs/FPIs have sold Rs. 333 billion in January 2022 and Rs. 100 billion in February 2022. Foreign Institutional Investors (FIIs) Derivative Statistics have shown a rise in the open interest (OI) in stock futures, index options, stock options and index futures.
Wallstreet indices witnessed sudden sell-off in last hour of trading amid tensions over Russia and Ukraine. For the whole week, indices tumbled over the concerns of higher inflation growth which resulted in Dow Jones declined by 1%, Nasdaq slipped by 2.2%, and S&P 500 down by 2%. �
European indices closed on negative note on Friday, amid tracking global equity sentiment. During the week, DAX up by 2.63% and FTSE up by 2%.
Crude oil prices touched USD 95 per dollar as Russia invasion on Ukraine could hit the supply side, also, US crude inventories fell more than expected. During the week crude prices rose by 1.25%.
Gold prices rose by 2.8% during the week during as its safe-haven appeal was boosted by growing geo-political tensions.
Global Economy
The US trade gap in both goods and services rose 27% to hit USD 859 billion in 2021, an annual record as imports grew faster than exports. The imports surged 20.5% and exports were up 18.5%.
The annual inflation rate in the US accelerated to 7.5% in January 2022, the highest since February 1982 and well above market forecasts of 7.3%.
The number of Americans filing new claims for unemployment benefits decreased by 16,000 to 223,000 in the week ended 5th February 2022, the lowest in five weeks and below market expectations of 230,000 as the impact of the spread of the omicron coronavirus variant started to fade.
US crude oil inventories fell by 4.756 million barrels in the week ended 04th February 2021, following a 1.046 million drop in the previous period and compared with market forecasts of a 0.369-million-barrel rise, data from the EIA Petroleum Status Report showed.
The Bank of Japan left its key short-term interest rate unchanged at -0.1% and that for 10-year bond yields around 0% during its January policy-meeting. Central bank adjusted its view of inflation risks for the first time since 2014, raising its inflation forecasts for Fy 22 that begin in April 2022 to 1.1% from earlier forecasts of 0.9% made in October 2021.
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