Published on 19/09/2020 2:25:13 PM | Source: Motilal Oswal Financial Services Ltd

Daily Market Commentary by Mr. Siddhartha Khemka, Motilal Oswal

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Below is the Views On Indian equity markets opened positive but remained consolidative by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

“Indian equity markets ended a volatile day almost flat due to FTSE related rebalancing and concerns on the India China relations. Nifty50 closed just 11 points lower (-0.1%) at 11505, while Sensex ended 134 points lower (-0.3%) to 38,845. Even the broader market closed in marginal red with Nifty Midcap 100/Nifty Small Cap 100 down -0.1%/-0.4%. India VIX too was flat at 19.9. Pharma sector was the star of the day with the index gains of 5%. Realty, Auto, Media and IT sectros closed in green, while selling pressure was seen in Banking and financials which led to the fall in the market.    

The global markets were mixed while US futures declined, as uncertainty about the coronavirus’s impact on businesses continued to weigh on stocks despite Central bankers globally pledging to do whatever it takes to support the economic recovery. US markets were down as technology-related shares slid for a second day and as government data showed high levels of weekly jobless claims. On the domestic front, weak global cues and rising border tensions between India-China, dragged the market. Also FTSE releated rebalancing in the last half hour of trade led to some selling in key banking stocks which dragged the market. The day clearly belonged to Pharma with a lot of positive developments - USFDA approval, new launches and development of Covid 19 vaccine boosted pahrma stocks. Dr Reddy was in focus after it announced settlement of its litigation with Celgene relating to Revlimid capsules. Celgene has agreed to provide the company with license to sell volume-limited amounts of Revlimid capsules in US beginning after March 2022. Cadila Healthcare gained after US FDA approval of Potassium Chloride tablets. Both Cipla and Lupin Labs were also in focus after Ireland’s pharmaceutical company Perrigo announced a voluntary recall of albuterol sulfate inhalation aerosol which is likely to increase sales of the same drug manufactured by these companies.    

Going forward, market would continue with its cautiousness with positive bias as investors would keep a close eye on US and their response to the further stimulus demand to deal with the pandemic. Some of the other key data that would be released next week would be the PMI for the US, UK, Eurozone and Japan and the Policy decision in New Zealand. On the domestic front, investors would track developments around India-China border issues. If the weakness persist in the market, one should take advantage of it and add quality stocks in their portfolio as the overall long term market trend remains positive.    

Technically, Nifty has to respect its immediate support of 11450 zones, to witness an up move towards 11600-11650 zones while on the downside next major support exists at 11350-11330 zones.”


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