Published on 5/02/2020 6:12:09 PM | Source: Motilal Oswal Services Ltd

Daily Market Commentary 05 February 2020 by Mr. Siddhartha Khemka

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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 continued with its rally for the third day, with Nifty crossing its psychological mark of 12k led by positive global and domestic cues. Nifty ended 0.9% higher to close at 12090. Broader markets continue to participate in the rally with Nifty Midcap 100/Nifty Smallcap 100 up 1.2%/0.8%. All the sectors ended in green except Media (-0.8%) with Metals (+3.1%) being the biggest gainer followed by Realty (+2.2%) and Banks (+1.1%). Post strong manufacturing PMI data, even Services PMI accelerated to a 7-year high in January, owing to surge in business orders, thus raising hopes of an economic recovery. On the global front, investors cheered China’s stimulus measures which may help to curtail the impact of the coronavirus outbreak and hopes for further stimulus.

Market will now await the monetary policy due tomorrow, where RBI is expected to maintain a status quo, due to the continuing inflation. However, the outlook given by RBI would be highly watched out. On the global front, there is a hope of further stimulus by the Chinese government to support the economy, which lifted the global market sentiments. On the domestic front, some of the economic data have started showing positive trends, signalling bottoming out of economy. However, we still expect the growth recovery to be gradual. We expect the markets to stay narrow until the emergence of greater evidence of growth recovery. Meanwhile, select sectors with better earnings visibility will continue enjoying valuation premium over the broader markets.

Technically, Nifty formed a Bullish candle on daily chart and closed above its 50 DEMA which is a positive sign. Now, support is gradually shifting higher to 11950 then 11835 levels. Till the time, Nifty holds above 12050 levels, the ongoing move may extend towards 12150 – 12200 levels.”



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