Published on 26/09/2020 5:59:31 PM | Source: Motilal Oswal Financial Services Ltd

Daily Market Commentary 26 September 2020 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 bounced back today after snapping the six-day losing streak amidst positive global cues. Nifty50 rallied 245 points up (+2.3%) to 11050, while Sensex surged 835 points (+2.3%) to 37,389. The broader market also participated in the rally with Nifty Midcap 100/Nifty Small Cap 100 up +2.9%/+2.6%. India VIX also cooled down 11.7% to 20.8. All the sectors gained more than 2% with IT, Auto, Media and Infra being the biggest gainers, up more than 3%.  Tech witnessed smart rally after Accenture announced in-line with expected Q4 results. Only three stocks ended in red in Nifty50 - SBI Life, BPCL and UPL. While top gainers included Bajaj Finserv, HCL Technologies, Cipla, Bharti Airtel and IndusInd Bank.


The global cues turned positive amidst renewed hopes of fiscal stimulus from the US. As per the media reports, U.S. Democrats are drafting a new $2.4 trillion relief bill, aimed at resuming the stalled stimulus talks with Republicans. The House could vote on the bill as soon as next week. However, European markets remained weak with the second wave of coronavirus returning to UK and other parts of Europe. On the domestic front too, hope of more stimulus measures from the government ahead of the festive season to create jobs and push demand boosted market sentiments.


Technically Nifty formed a Bullish Candle on daily scale while a Bearish Candle on weekly scale which indicates that some bounce could be seen from lower levels but supply pressure could remain intact at higher zones. Even Nifty one-year forward PE at 21x doesn’t offer much comfort. Hence, despite today’s rally, we expect market to consolidate in near term given the rising Covid cases globally, economic uncertainty and continuous FII selling for past few sessions. “


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