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Daily market commentary 12 December 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Domestic indices pared its early gains despite strength in global peers. Weak Nov Mutual Fund inflow data and downbeat outlook by IT giant HCL tech led to some profit booking in the market. Nifty opened positive but reversed its initial gains to close with loss of 113 points at 18497 levels. Buying was seen in FMCG, Pharma and Banking sector stocks. IT sector saw sharp decline after HCL Tech said that it expects FY23 revenue growth to be at the lower end of its 13.5%-14.5% guidance due to furloughs and drop in spending in some sectors. Markets seems to be consolidating for last few sessions as participants are lightning their position ahead of crucial US Fed meeting next week. US PPI data to be released later on Friday as well as US CPI data on 13th Dec – would be keenly watched as they would influence the Fed’s interest rate decision. Further, FIIs have remained net sellers (Rs.5500crs) in December so far (baring one positive day) and added to the overall pressure in the market. Nifty has corrected by nearly 400 points (2%) after making a new high of 18,888 last week. We expect the consolidative mode to continue till key central banks like US Fed, ECB, BoE outcome next week. We expect weakness in tech stocks to continue on account of weak growth outlook, FMCG stocks are expected to do well on the back of fall in commodity prices and improving demand.

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