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Published on 18/08/2020 7:21:07 PM | Source: Motilal Oswal Financial Securities Ltd

Daily Market Commentary 18 August 2020 by Mr. Siddhartha Khemka, Motilal Oswal

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

“Indian equity markets opened in green and continued its positive momentum throughout the session to end near day’s high. Nifty finished higher for second consecutive day, closing 138 points higher (+1.2%) at 11,385, while Sensex ended 478 points higher (+1.3%) at 38,528. Even the broader market rallied with Nifty Midcap 100/ Nifty Smallcap 100 up +1.2%/+1.5%. All the sectors ended in green except Pharma (-0.1%). Realty was the biggest gainer, up 4%, followed by Banks, Financials, Metals and Media which gained ~2%. India VIX further cooled down 4.2% to 20.4 levels.

The global cues were mixed as US-China tensions weighed on optimism led by US tech-driven rally. The Trump administration said a day earlier that it will further tighten restrictions on China's Huawei Technologies, aimed at cracking down on its access to commercially available chips. On the domestic front, announcement of favourable government policies to help support the economy continued to lift investor sentiment. Lot of action was seen Mid-cap and small cap counters, especially NBFC, Chemical and fertilizer, after the Government extended scheme for financing NBFC borrowings and extended anti-dumping duty on caustic soda.

Nifty has been trading in a tight range for last few sessions, on the back of mixed global and domestic cues. However, the major trend is positive and a consolidation breakout could start the fresh leg of rally in the market. Volatility is gradually cooling down which suggest that bullish stance is likely to continue and we recommend a buy on decline strategy in the market. Going ahead, market will track developments over the fresh US economic relief and the outcome of the US-China trade talks. Besides, the upcoming OPEC meeting will also be closely watched. Even the AGR hearing is going on and the outcome from the Supreme Court will have a bearing on telecom and banking stocks.”

 

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