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Below is the Views On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
After witnessing sharp falls over past two sessions, Indian Equity market ended flat today amidst volatile trade. Nifty50 index closed at 10,449, down mere -0.02% on the back of a bounce in oil prices, although worries over the rapid global spread of the coronavirus capped gains. The overall market breadth was negative, with both Nifty Midcap 100 and Nifty Smallcap 100 down 1.0%/0.4%. Sectorally it was a mixed bag with Media being the biggest gainer (+1.7%), followed by Private Banks (0.4%) and FMCG (+0.2%). PSU Banks were the biggest loser (-3.9%), followed by Realty (-2.7%) and Metals (-2.1%).
Despite the bounce back in the crude prices, investors are worried over the ongoing price war between Saudi Arabia and Russia along with the rapidly spreading coronavirus. Bank of England (BoE) followed the footsteps of US Fed and surprised the market by slashing its benchmark interest rates by 50 bps to 0.25%. Global markets are continuously tracking the developments around stimulus across countries. Even US is likely to announce stimulus which led to sharp rally in US markets yesterday.
Though the market has bounced back today, it is likely to remain under pressure till the coronavirus spread doesn’t slow down. However, with this correction, the earnings yield have turned higher than bond yields thus providing attractive entry points into many fundamentally strong companies. Until we see a semblance of normalcy returning, we would advise traders to stick to selective buying into quality stocks.
Technically, immediate support for Nifty is placed at 10300 and then 10200 levels; while major resistance remains intact at 10650 and then 10750 levels.
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