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Published on 21/09/2020 6:09:40 PM | Source: Motilal Oswal Financial Services Ltd

Daily Market Commentary by Mr. Siddhartha Khemka, Motilal Oswal 21.09.2020

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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 witnessed a sharp fall today induced by negative global cues. Nifty50 crashed 254 points down (-2.2%) to 11250, while Sensex fell 812 points lower (-2.1%) to 38,034. Even the broader market saw heavy profit booking with Nifty Midcap 100/Nifty Small Cap 100 falling -4.1%/-4.2% respectively. India VIX too jumped 13% to 22.7. All the sectors ended in red, with Realty and Metals among the major losers having lost 6.0% and 5.5% respectively. Media, Pharma and Auto lost around 4.5% each while Nifty Bank and FMCG fell around 3.5%.  Even Nifty IT, which had previously gained for 7 consecutive sessions closed in red with minor losses of 0.7%.

 

The global cues were negative at the start of the day with Lofty valuations, fading U.S. stimulus and Fresh wave of coronavirus infections in Europe being major risks. In US, attention is turning back to negotiations on fresh stimulus and the forthcoming election. Further, European markets fell after a report on bank allegations and signs that London is heading for a second lockdown. HSBC Holdings Plc fell to the lowest since 1995 and European bank shares dropped following a story by the International Consortium of Investigative Journalists on lapses in suspicious activity reports. With virus cases climbing across Europe, there’s growing concerns that officials may be forced to implement tougher lockdowns and restrictions which could impact economic growth. On the domestic front, weak global cues and profit booking ahead of the monthly F&O expiry this week dragged the market.

 

Going forward, market would continue with its cautiousness as investors would keep a  close watch on the rising Covid cases and delay in US stimulus. On the domestic front, investors would track developments around India-China border issues. Technically, Nifty broke its key support of 11330 and witnessed negative crossover on Mechanical indicator on daily and weekly scale. Now till it sustains below 11330 zones, then more weakness could be seen towards 11,100 – 11,000 zones while on the upside hurdles are shifting lower to 11450 zones. Investors should remain with defensive portfolio approach while following buy on decline strategy. Traders on the other hand, should be cautious and keep booking profits at regular intervals. “

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