Below are Quote on Daily Market Commentary 02 July 2021 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services
Equity markets opened positive and traded in narrow range for most part of the session. Nifty/Sensex ended 42/166 points higher (+0.3% each) to close at 15,722/52,485 respectively. Broader market continued to outer-perform and ended on a positive note with Nifty Midcap 100/Nifty Smallcap 100 up +0.5%/+1% respectively. Among sectors, metal indices shed 1% followed by FMCG, energy and PSU bank – down marginally, while buying was seen in the infra, pharma, Fiancia, Media and Private bank.
Global cues were mixed as cases of Delta variant corona virus continued to hover, while investors keenly await US job and PMI data which is due later today. Domestically, late hour buying in selected financial and pharma stocks helped the indices to end on positive note with minor gains. RBI released its Financial Stability Report which indicated that RBI has toned down its expectation that bank may face stress due to covid crisis. Among stocks, Divis Labs, Reliance, ICICI bank, Coal India and Tata consumer were top gainers. On the flipside, Tata Steel, JSW Steel, Britannia, Powe rgrid and Grasim were top laggards.
Going ahead, the equity market may continue to consolidate in the near term given the worry over the potential risk from Covid third wave and the commodity price led inflation and in absence of any fresh trigger. Investors would take cue from US jobs data and US PMI data due later today. Nifty valuations at the current juncture is not inexpensive and demand consistent earnings delivery ahead. Any disappointment on the earnings front could weaken the overall positive sentiments. However, we expect the earnings momentum is to accelerate given the pickup in the pace of vaccination and the further opening of the economy. Good monsoon further supports bullish biasedness.
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