Below is the View On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
“Indian equity markets after opening gap up, gave up majority of its gains and ended flat. Nifty closed in marginal green at 11,102 (+0.1%), while Sensex ended in marginal red at 37663 (-0.1%), dragged down by Reliance Industries and HDFC Bank. Reliance Industries and HDFC Bank, which contributed 80% to Nifty's 200 point surge yesterday, contributed 35 points to the downside in today's session, keeping the gains in check.
However, the broader market outperformed the benchmarks with Nifty Midcap 100/Nifty Smallcap 100 up +0.6%/+1.1%. Metals (+4%) was the biggest gainer on the back of improved China data, followed by Auto (+1.8%) which gained led by demand recovery. On the other hand, Energy (-0.5%) and Pharma (-0.5%) were the top laggards. India VIX cooled down by 1.3% to 23.5 levels.
Global cues were positive led by a batch of positive earnings. On the domestic front too, better than expected results season so far is driving the positive momentum, further aided by the liquidity. Investors tomorrow in early trade would watch out for the commentary and RBI decision post its MPC meeting. The market might continue its positive movement, but we find the risk-reward unattractive with valuations at 21x one-year forward Nifty EPS. Hence, we would advise investors to remain defensive in their portfolio approach. Traders on the other hand are advised to stay cautious and keep booking profit at regular intervals.
Technically, Nifty has formed a Bearish candle which indicates that follow up is missing even after the recovery of last two trading sessions. Index has got stuck in a trading range where dips are being bought but supply pressure is clearly visible at key resistance zones.”
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