The US markets ended the week in green, with the S&P 500 up 2.39%, NASDAQ rising 3.70%, and the Dow Jones up 1.47%, as investors took advantage of lower valuations at the end of a roller-coaster week dominated by concerns about aggressive monetary policy tightening and slowing economic growth.
Fed Chair Powell said that bringing inflation down to the central bank’s target of 2% could cause some pain, including a recession. Markets interpreted such remarks as more dovish, easing fears that the Fed would increase rates by 0.75 percentage points at some point.
Asian markets on Monday weren’t doing as well, struggling to sustain even a minor rally after shockingly weak data from China underlined the deep damage lockdowns were causing to the world’s second-largest economy.
Japan’s Nikkei gained 0.75%, Australia’s ASX 200 rose 1%, and China’s Shanghai Composite up 0.96%. SGX Nifty was trading at a high of 0.3% this morning in Asia.
In India, the BSE Sensex on Friday ended by a low of 0.26%, snapping early gains amid heavy selling pressure in metals, telecom, and banking stocks. The Indian equity index fell despite an upsurge in other Asian markets as fears of rising inflation amid the Russia-Ukraine war weighed on investor sentiments.
FII/DII data for the day showed FII outflows amounting to 3,780.08 crores, and DII inflows of 3,169.62 crores. The Indian Rupee is growing weak, currently standing at 77.47 INR against the US dollar.
Overall, market sentiment looks bearish, focusing mainly on the weak Chinese economy today. But gains were seen by other country indexes, although comparatively small. Under these circumstances, how will the Indian markets begin their week?