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Published on 1/07/2020 6:43:12 PM | Source: Motilal Oswal Financial Services Ltd

Daily Market Commentary 1 July 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 witnessed positive momentum led by Banking and Financials; thus ending at one week high. Nifty surged 128 points (+1.2%) to end at 10430 while Sensex ended 499 points higher (+1.4%) to close at 35,414. The broader market also gained marginally with Nifty Midcap 100/ Smallcap 100 up 0.5%/0.9%. All the sectors ended in green except Pharma which was down 1% while Auto and IT ended flat.  India VIX cooled down 3.5% to 28 levels.

Global sentiments were somewhat positive as improving economic data across countries was partially offset by the worries about surging coronavirus cases. Even domestically, better GST collection and strong PMI data boosted market sentiments. Nifty has managed to breakout from the narrow trading range of the last four trading sessions (10200-10400), which is indicating that bulls are gaining strength. While there are concerns over rising coronavirus cases and chances of second round of lockdown, market seems to be factoring in positive macro-economic data. While the near term momentum may continue, investor should stay cautious as valuations are becoming stretched.

Currently the market is oscillating between greed and fear. On one side there is hope of gradual economic recovery along with strong liquidity inflows while on the other side, there is fear of sharp rise in covid cases and chances of second round of lockdown. We would advise investors to stay cautious and look for buying opportunities on declines, as at current valuations, the upside looks limited. Q1 results which would kick start from next week would be keenly watched out.

Technically, nifty may witness an up move towards recent swing high of 10555 and even higher while immediate support is placed at 10300-10250 levels.”

 

 

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