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Published on 23/09/2020 11:13:34 PM | Source: Pr Agency

Daily market commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

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Please find below the daily market commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.:

 

“Indian equity markets opened green but yet again slipped in red in the second half, extending the decline for the fifth consecutive day. Nifty50 fell 22 points down (-0.2%) to 11132, while Sensex closed 66 points lower (-0.2%) to 37,668. The broader market also witnessed weakness with Nifty Midcap 100 ending -0.3% down while Nifty Small Cap 100 closed flat. India VIX also fell 2.5% to 20.9. Majority of the sectors ended in red with Media being the biggest loser, down 2.4%, followed by Pharma and PSU banks which were down ~1.5% each. Realty, Private Banks and Financials were the only sectors that managed to end in green while FMCG ended flat.  

 

The Asian markets ended mixed while European markets opened strong after bounce back was seen in US markets overnight. The Fed Chairman Jerome Powell statement that the economy has a long way to go before fully recovering and will need further support, allayed some concerns. Even the existing Home sales data came better in August, as inventories continued to decline. On the domestic front, Reliance provided support to the market as U.S. PE firm KKR agreed to invest Rs55.5bn in Reliance's retail arm. Further it also gained post Reliance Jio stepped up competition with new postpaid plans bundled with video-streaming services. However, this led to sharp 10% fall in Bharti Airtel. TCS also fell as much as 4.5% after, Shapoorji Pallonji group, the largest minority shareholder in Tata Group, said that it wanted to separate interests from the Tata group companies. India and China decision to not send more troops to the contested border also supported the market but reemerging virus hotspots in Europe and rising worries over the pace of economic recovery kept markets cautious.

 

Going forward, market would continue to consolidate in near term as investors keep a  close watch on the rising Covid cases and delay in US stimulus. Technically too, till Nifty sustains below 11250 zones, bounce could be sold for further weakness towards 11000 while on the upside medium term hurdle is shifting lower to 11350. Cool down in volatility even after weakness in market indicates that some sort of range bound move along with capped upside could be seen for next coming sessions.”

 

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