Below is the Daily Market Commentary By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
Equity markets closed positive for second consecutive day. Nifty/Sensex rose 107/272 points (+0.7%/+0.6%) to close at 14,725/48,950. The broader markets too gained with Nifty MidCap 100/Nifty Smallcap 100 up +0.9%/+0.7% respectively. Except for Pharma (-0.2%) and PSU Banks (-1.2%) which witnessed profit booking post yesterday’s rally, all other sectors closed in green. Metals (+2.5%), IT (+1.8%) and Auto (+1.8%) were the biggest gainers. Banks, Financials, FMCG, Realty, Energy and Infra gained less than 1%.
Global cues were positive as investors continue to monitor corporate earnings and signs of economic recovery from the COVID-19 pandemic impact. On the domestic side, Nifty continued its positive momentum for second day in a row post US decision to support waiving IP protections for Covid-19 vaccines. However, spike in daily cases after five days of decline, continue to worry the market as the increasing lockdowns/restrictions would further slowdown the economic recovery. On the other hand, the 4QFY21 results is resulting in lot many stock specific action in the market. Hindalco was the top Nifty gainer, up 6%, followed by Hero MotoCorp, Wipro, Tata Motors and Tata Steel. UPL was the top laggard, down 1%, followed by Bajaj Finserv, Sun Pharma, Power Grid and NTPC.
Going forward, markets are likely to remain range bound along with bouts of up and down. Resurgence of the second COVID wave has dented sentiments and weakened FY22E earnings visibility. While the market is currently looking beyond the short-term impact, if the pandemic doesn’t subside soon, it opens up downside risks. 4QFY21 earning season has been the silver lining so far as it has progressed well so far, but earnings downgrades are now rising, given the widespread restrictions in various states. Going ahead the interplay of resurgence in COVID-19 cases and the pace of vaccination would decide the trajectory of economic recovery going forward.
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