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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 rebounded after taking a pause yesterday, on hopes that the coronavirus pandemic was nearing its peak globally and second stimulus package from government is likely to be announced in coming days. Sensex rallied 1,266 points to close at 31,160 level (+4.2%) while Nifty50 was up 363 points to close at 9112 level (+4.2%). The overall market breadth was positive with Nifty Midcap 100/Nifty Smallcap 100 up 3.3%/3.8% respectively. All the sectors ended in green with Auto being the largest gainer, up 10.5%. It was followed by Metals (+5.0%), Banks (+4.8%) and Pharma (+4.5%). India VIX further cooled down to 50 levels (-5.1%).
Market posted weekly gains of more than 12.5% after falling consecutively for the last seven weeks, recording biggest weekly gains in 11 years. All the sectoral indices also posted gains this week with Auto being the largest gainer, up 23%. Market sentiments got boosted on hopes that the government will soon announce a second stimulus package over Rs 1 lakh crore for helping small scale industries tackle the economic crisis due to the novel coronavirus pandemic. Global Rally also supported the domestic market as policymakers discussed the process of reopening the global economy with the data showing that the Covid-19 was nearing its peak. However, investors are worried that the lockdown in the country could be extended considering the rising cases in India. Thus, market would continue to remain volatile with swing on either side as it would track global developments around the trend in coronavirus cases and stimulus. So any update on the national lockdown would impact the markets either ways.
Technically, hurdle for Nifty is now placed around 9400, followed by 9800 zones. On the flipside, immediate support is inching higher to 8900 and then 8650-8550 zones. A hold above 9100-9300 zones with follow up buying interest could give a confirmation for a short term bottom process in the market with shift in higher trading bands.”
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