Weekly Market Insights: 9th Jan 2022

Though markets ended the week higher, there was significant volatility through the week. Smallcap indices ended up being the biggest beneficiaries of the rally.

Key events moving markets are the news of the new Covid variant spreading and monetary policies of Central Banks. The new Omicron variant however, is not spooking markets as much as the scare of interest rate hikes.

Seeing the past trend, Fed seems to be turning towards interest rate hikes way sooner than anticipated. 6 months back, they said interest rate hikes wouldn't appear till 2023 and now a possible hike is anticipated in early 2022. Fed has signalled 3 possible interest rate hikes in the year, with the first one being as early as March.

Interest rate hikes and the Fed Monetary Policy will be a key tone-setter for equity markets in 2022.

The week could be a great illustration for the kind of market movement expected through the year - upward movement but with ample volatility being thrown in small intervals that can provide good buying opportunity.

Banks and auto continued shining through the week. Banking stocks outperformed headline indices, by a huge margin - something that hasn't been seen in the sector in a long time. Pharma and IT saw selling pressure and lost some of the gains made last week.

Mutual Fund Industry Highlights

Post regulatory approvals, Principal MF has been officially acquired by Sundaram Mutual Fundhouse. All Principal Schemes have been re-named to Sundaram subsequently.  

NFOs currently open

• ICICI Prudential Passive Multi-Asset Fund of Funds
• Axis Nifty Next 50 Fund
• Navi Nifty Next 50 Fund
• SBI CPSE Bond Plus SDL Sep 26 50 50 Index Fund