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Below is the Views On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
“Equity markets bounced back sharply as crude prices slumped after US-Iran tensions appeared to have eased. Both Sensex/Nifty50 were up 1.6% to close at 41,452/12,216. Almost all the sectors ended in green led by Banking, Auto and Realty stocks. On the other hand, IT was the only loser as rupee rose after crude oil prices fell 5% overnight. Even broader markets participated in the rally with Nifty Midcap 100/Nifty Smallcap up 1.4%/2.1%. The India VIX index fell 10% today.
Market sentiments have revived as oil prices have cooled down due to no further escalation of tensions in the Middle East. The US has offered to impose sanctions on Iran instead of military action which eased off the tensions. On the domestic front, the government has eased laws to fast-track mining at sites and also imposed import duty on copper wire rods. Earnings season would kick start from Friday with Infosys declaring its results. We expect this 3QFY20 to be another quarter of muted earnings, largely led by BFSI, Auto and Consumer. We estimate Nifty PBT/PAT to increase 2%/8% YoY, while ex-BFSI, we expect Nifty PBT/PAT to decline 6%/2% YoY. Going ahead, markets would continue to be volatile in short term due to the tension in Middle East and upcoming 3QFY20 earnings season. Investors would also be watching out for pre-budget developments which would influence the market.
Technically, Nifty formed a Bullish Candle on daily scale and negated the formation of lower highs of last four trading sessions and headed towards 12224 level. It reclaimed 12200 zones after volatility and correction of last three trading sessions but Bulls are back with the support of Global market. Now it has to continue to hold above 12150 zones to witness an up move towards lifetime high of 12300 then a fresh rally towards 12400-12500 zones. On the downside major support is at 11900-11835 zones while immediate support shifts at 12050 levels.”
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