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Below is the Views On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
“Markets continued its weakness for second consecutive day on the back of weak results of some heavyweights and concerns over economic growth. Both Sensex and Nifty fell by 0.5% to 41323/12169. However broader market continues outperforming benchmarks with Nifty Midcap 100 down 0.1% while Nifty Smallcap 100 being up 0.1%. Majority of the sectors ended in red except Media (+2.2%) and Pharma (+0.1%). Realty (-1.4%), Auto (-1.3%) and Metals (-1.3%) were the top losers. IMF has lowered the GDP growth forecast for India which dampened the market sentiments. The mood was further affected due to breakout of coronavirus in China which concerned the global markets.
IMF has lowered the GDP growth forecast to 4.8%/5.8%/6.5% for 2019/2020/2021 and listed the country's much lower-than-expected GDP numbers as the single biggest drag on its global growth forecast for two years. Poor quarterly results announced by some heavyweights also dampened the market sentiment. Pre-budget rally has taken a break as the focus has shifted to the quarterly earnings. Tomorrow also lot of heavyweights would be announcing their results including L&T, Asian Paints, Axis Bank, RBL Bank, Au Small Finance, SBI Life, etc which would keep the markets volatile. We continue to believe that the market would be witnessing sector specific and stock specific action as the Q3 earnings season progresses and as expectations to the run up to the budget build-up for certain sectors. Investors should remain cautious as the markets are at all-time high and valuations are stretched.
Technically, Nifty formed a Bearish candle as it failed to hold 12200 zones and corrected towards 12162 levels. The ongoing profit booking started from its strong hurdle of Rising Trendline on weekly chart and now index is approaching the previous Gap area of 12044 - 12130 zones. We also witnessed a series of negative divergence of RSI oscillator on daily scale, which doesn’t bode well for the bulls. Going forward, immediate support for Nifty is placed in the zone of 12130 then 12050 levels. While immediate resistance for Nifty is now shifting lower to 12250 levels. However, medium term resistance is placed at 12400 - 12430 zones”.
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