01-01-1970 12:00 AM | Source: Motilal Oswal Financial Services Ltd
Daily Market Commentary 25 April 2021 By Mr. Siddhartha Khemka, Motilal Oswal Financial Services
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Below is the Daily Market Commentary By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Equity markets ended the highly volatile session on a negative note amidst persistent concern over record Covid cases in India. Nifty/Sensex ended 65/202 points lower (-0.4% each) to close at 14,341/ 47,878 respectively. Broader markets however ended in green with Nifty MidCap 100/Nifty Smallcap 100 up +0.3%/+0.4%. Majority of the sectors ended in red, with Realty (-1.1%), FMCG (-0.9%) and IT (-0.8%) largely dragging the market down. Even Metals, Pharma, Auto and Infra ended 0.3% to 0.5% lower. On the other hand, Energy (+1%), Media (+0.5%) and PSU Banks (+0.3%) ended with gains while Private Banks and Financials ended flat.

 

Global cues were weak as reports of a possible increase in capital gains tax in the US dented sentiments. On the domestic side, Nifty witnessed huge volatility, oscillating between gains and loss before finally ending in losses, indicating fragile sentiment of investors. Total cases of the coronavirus in India rose by another record of 332,730, while a record 2,263 people had died in the last 24 hours, as hospitals struggled to arrange oxygen supplies and intensive care beds for patients. It is fast spreading from major cities to tier 2/3 cities where the healthcare infrastructure is not adequate thus raising the concerns further. Technically, Nifty formed a small bodied candle similar to Doji on daily and weekly scale with long shadows indicating tug of war between Bull and Bears. Now, it has to cross and hold above 14400 zones to witness a bounce towards 14600 and 14700 zones while on the downside, support exists at 14250 and 14150 zones.

 

Going ahead, Indian markets are likely to continue with its volatility till COVID-19 cases continue its upward trajectory. Investors would continuously watch out government’s course of action along with progress on vaccination drive. Once the availability and the pace of vaccination picks-up and daily cases start subsiding, we expect the narrative to gradually shift from Covid-19 and restrictions back to fundamentals. We would recommend investors to take advantage of this volatility as the medium term thesis remains unchanged.

 


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