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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 closed in red today post the 2-day rally on the back of escalating geo-political tension and spike in global oil prices. Both Sensex/Nifty50 were down 0.4% at 41,464/12,226. Except IT and Pharma, almost all sectors ended in red led by Banking and Auto stocks. Markets turned cautious after US airstrikes killed a top Iranian commander, intensifying geopolitical tensions in the Middle East.. Brent crude futures jumped to their highest since Sept’17 and was up 2.88% at $68.16/barrel. MCX Crude oil index soared by 4.7% at 4,547, reflecting concerns that escalating Middle East tensions may disrupt oil supplies. The rupee also fell sharply to 71.77 against the US dollar.
With markets near all-time high, emergence of geopolitical tensions led to some profit booking. Markets could be volatile going ahead due to risk of possible retaliation from Iran. However, on the positive side, markets would be looking ahead for signing of the phase 1 of the US-China trade deal along with the Dec quarterly results and developments prior to the Union Budget.
Technically, Nifty continued to make lower lows for major part of the session. However, due to some pullback towards the fag end, Nifty trimmed-off some of its losses and formed a red bodied candle with lower shadow on daily scale. It has been consolidating in between 12118 to 12293 zones from last twelve trading sessions and now a decisive range breakout with follow up action could drive the fresh leg of rally. At current juncture, Nifty is hovering around its strong support of 12150 - 12200 zone and now it has to continue to hold above this zone to witness an up move towards 12300 - 12350 levels.
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