Market Insight 18th Oct 2022

Global recessionary pressure has kept the markets either tangent or range bound for the most part barring the short-lived respite in early September. As expected, the pressures got the better off the domestic markets by October like we had discussed in our last quarterly insight.

Other than the heavy FII selling, depletion in forex reserves due to the rising dollar, widening current account deficit has been fuelled further by our dependency on China for API's (active pharmaceutical ingredients). Given the dodgy Chinese economical conditions, the pharma sector which was one of

n the index a while ago has seen a lot of correction in recent times and we expect this to continue in the short run at least. That leaves a few vacant spots in the leaders of the next surge which may be led by Industrials, Infra and IT.

The other opportunity will lie on how the telecom infrastructure is developed soon to cope with 56 needs, so we may see some new opportunities coming up here too.

With the FED hinting at more rate hikes, markets will be factoring in the impacts in the upcoming weeks along with scores of profit-booking trades which may allow one to buy good companies at cheap or fair prices. As for those already invested, expect to remain patient till December if all your holdings are fundamentally sound or you may need to rejig your portfolios because this is the market that has been and will continue to produce more sector leaders unlike before.

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