Vinod Bhat's Market Pulse - Mar 10, 2023
2-min read to stay updated on markets and become better investors
S&P500 and Nasdaq fell ~2% on Thu and S&P 500’s financial sub-index dropped by ~4% on concerns about the value of banks’ holdings of Treasuries and other debt instruments in an environment of rising interest rates.
At the same time, US jobless claims rose more than expected, signalling the labour market may be starting to slow. The payrolls report due today is keenly awaited to see if it will corroborate this data. Markets are pricing in 80% probability of a 50 bps hike by Fed in Mar.
Indian markets are getting impacted due to global macro concerns as US yields rise and Dollar strengthens even as domestic data points are reasonably strong.
Some meaningful shifts have happened in India's services economy. On a net basis, services exports are now bringing in USD 60 bn/year more in revenues than in the pre-pandemic period. This has provided some much-needed relief on the Balance of Payments (BoP) front.
There is also evidence of capex and credit cycle driving demand in the economy. Q3FY23 GDP growth was largely supported by GFCF (gross fixed capital formation) growth of 8.3% while consumption (PFCE – private final consumption expenditure) lagged at 2.1%. Other high-frequency indicators such as robust core sector growth, electricity demand, thermal PLF and diesel consumption are corroborating this.