Below is the Daily Market Commentary 27th September 2021 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
Equity markets opened gap up but immediately gave in to profit booking resulting in volatility throughout the session. The indices erased its initial gains to finally end the session flat with positive bias. Auto sector was in top gear after Govt clears incentives worth Rs.26,058cr offered under the PLI scheme. The PLI scheme is expected to bring in new investments worth more than Rs 42,500 crore in five years and incremental production of over Rs 2.3 lakh crore. Further, Ratings agency Icra revised its 2021-22 real GDP growth estimate for India to 9% from the earlier 8.5% on back of widening coverage of COVID-19 vaccines, healthy advance estimates of kharif (summer) crop and faster government spending. It expects the second half of the fiscal year to have brighter prospects.
Global cues were positive as China’s central bank assured of ample liquidity and promised a healthy development in the country’s real estate market amidst stress among real estate developers. On the other hand, $1.2 billion infrastructure package has been pushed back by House of Representatives, putting pressure on the government to extend financing. European markets gained after Germany's elections point to only a slight shift to the left in the next government.
Markets are likely to consolidate at higher levels given the sharp run-up in the past few weeks. Also markets are increasingly witnessing rotation from outperforming sectors to under-valued stocks. This week lot of macro data points would be released viz. PMI data across US, Europe and China along with US and UK’s GDP data and Japan’s MPC and keep the markets busy. Also we might experience some volatility ahead of monthly F&O expiry on 30th September.
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