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Daily market commentary 30 September 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

RBI in its policy meeting raised its benchmark repo rate by 50 basis points to 5.9% which was in-line with market expectation. Since May’22 RBI has raised interest rate by 190bps and expect repo rate to be raised to 6.5% in this cycle. It expect inflation to come down close to its target of ~4% over a two-year period and projected real GDP for FY23 at 7%. Post RBI’s commentary, Nifty bounced in green and gained strength throughout the session. The rally was especially seen in banking sector stocks. This has also given some support to falling rupee which had depreciated by 7% since April’22. 

With most key events now behind, market finally found some strength on Friday. After 7 consecutive fall, Nifty witnessed strong rally and closed with gains of almost 300 points. It also reclaimed the 17,000 zones, making the short term technical view positive. Nifty can now move towards 17,500-17,700 zones with key support around 17,000 and 16850. Auto and consumption sectors would be in focus ahead of monthly sales data and high demand in the ongoing Navaratri festival. Pharma sector is seeing some value buying as market focused on defensive names in times of global uncertainty.

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