Sensex & Nifty gained the most in July by 8% vs YTD performance of -2.65%. Despite Fed hiking interest rates by 75bps for second time consecutively global markets reacted positively on the anticipation of slow-paced rate hikes for the rest of the year. With RBI policy-meeting due this week, markets are expecting 35 bps rate hike.
However, RBI has lot of catching up to do on rate hike front compared to its peer group. To stem capital outflows and further decline in INR, steep rate hike would be a much-needed catalyst for market rally. Steep rate hike by RBI would provide stronger relief rally across domestic markets i.e Gsec, INR, and Sensex & Nifty on expectations of policy stability going forward.
Click here to read our article on �RBI can do a one-time rate hike to 6% for multiple gains�.
�Global investors will watch out for US NFP data, PMI levels and BoE monetary policy decision. ITC, SBI, M&M, Lupin, HPCL, Adani group companies, Zomato and Paytm will come out with quarterly earnings. Auto sales will also be in focus.
Equity Market Summary:
� In domestic markets FIIs/FPIs sold Rs. 502 billion in May 2022 and bought Rs.49 billion in July 2022.
� Wallstreet indices witnessed the best performance month YTD amid upbeat earnings from Apple and Amazon boosted market sentiment. Also, on rate hike front market are expecting slower pace of rate hikes from Fed for the rest of the year as commodity prices cooled off from record highs.
� Fed raised the target range for the fed funds rate by 75bps to 2.25%-2.5% during its July 2022 policy-meeting.
� US economy unexpectedly contracted for 2nd straight quarter by 0.9%.
� Personal consumption expenditure price index in the US increased 1% MoM in June 2022.
� US crude oil inventories declined by 4.523 million barrels in the week ended 22nd July 2022.
� Number of Americans filing new claims for unemployment benefits dropped by 5,000 to 256,000 the week that ended 23rd July 2022.
� Eurozone economy expanded 0.7% during June quarter 2022 and beating market forecasts of a 0.2% gain.
� The Bank of Japan maintained its key short-term interest rate at -0.1% during its July policy-meeting.
� Industrial production in Japan rose by 8.9% MoM in June 2022, topping market estimates of 3.7%.
��
