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Published on 6/08/2020 7:34:39 PM | Source: Motilal Oswal Financial Securities Ltd

Daily Market Commentary 06 August 2020 by Mr. Siddhartha Khemka, Motilal Oswal

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Below is the View On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

“Indian equity markets opened with gap up and remained positive for most part of the session. Nifty closed 99 points higher (+0.9%) at 11,200, while Sensex ended 362 points higher (+1%) at 38,025. The broader market also participated in the rally with Nifty Midcap 100/Nifty Smallcap 100 up +1.1%/+0.4%. All the sectors ended in green except PSU Banks which was down 0.3%. IT, FMCG, Metals, Pharma, and Financial Services, all gained more than 1%. India VIX cooled down by 1.8% to 23.1 levels.

The RBI's MPC today kept the repo/reverse repo rates unchanged at 4%/ 3.35% and maintained its policy stance at accommodative which could continue for as long as necessary to revive growth. Further, the central bank also announced measures including one-time restructuring of the loans to support NBFCs, HFCs, corporate debt market, and announced a relaxation on the loan-to-value (LTV) ratio for gold loans. Thus all these measures along with accommodative stance boosted market sentiments. The global cues on the other hand were weak as investors waited for signs of agreement on a US stimulus package.

The market might continue its positive movement in the near term, with more stock specific action as the earnings season progresses. Investors would now be awaiting announcement of US stimulus which could bring cheer to the market. However we find the risk-reward unattractive at the current levels and 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 Doji candle which indicates tussle between Bulls and Bear in the market near to an immediate hurdle of 11250 zones.”

 

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