Below is the Views On Daily Market Commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd
“Indian equity markets opened positive but sharply declined in red in the last hour of trade, on the back of profit booking and weak global cues. Nifty closed in red for the third day in a row, down 122 points (-1.1%) to close at 11,178, while Sensex ended 433 points (-1.1%) lower at 37,877. Even the broader market witnessed selling pressure with Nifty Midcap 100/ Nifty Smallcap 100 down -0.9%/-1.2%. Majority of the sectors ended in red with Auto, Banks & Financial Services being the biggest losers, all down more than 2%. On the other hand, Pharma (+1.4%) and Metals (+1.1%) were the only gainers. India VIX climbed 5.8% to 21.8 levels.
The global cues were weak due to lacklustre Chinese economic data and confusion over US fiscal stimulus which weighed on investor sentiments. Even European markets fell by more than 1% after Britain added more European countries to its quarantine list. On the domestic front, profit booking continued as the valuations are no longer cheap and the earnings season is largely coming to an end. Market also turned cautious ahead of the SC’s AGR case hearing, which later got rescheduled for Monday. Further the India’s inflation number came in significantly higher than expected, thus leaving limited scope for a rate cut. Going ahead, the market volatility is likely to continue, largely mirroring global cues. Investors would look out for fresh triggers amid continued surge in domestic coronavirus cases. On Monday, the market would await outcome of AGR case hearing on the domestic front while on the global front, the US-China weekend meeting would provide some direction.
Technically, Nifty formed a small Bearish candle on a weekly scale which looks like a small pause in positive momentum. Now, it has to cross and hold above 11250 to witness an up move towards 11350-11400 while the support exists at 11100-11050.”
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