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Daily market commentary 22 February 2023 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Panic was seen across equities globally ahead of the release of the minutes from the last U.S. Federal Reserve meeting. While the key US macro data pointed towards a stronger economy, inflation continued to remain stubbornly higher. Hence, there is an increasing fear that the Fed may remain hawkish for a longer duration than expected, which may even force RBI to keep interest rates high. Statements from both Russian and US Presidents led to some increase in geo-political tensions and further bringing uncertainty into the equity markets. Nifty opened gap down and drifted lower throughout the day. The index finally closed with loss of 272 points at 17554. All sectors ended in red with most of it down more than 1%. Volatility index, India VIX rose sharply by 11% to 15.6 levels. Nifty has now fallen almost 580 points (-3%) in last five days. We expect market to remain weak for next few days amid monthly derivatives expiry and increase in global volatility. US Fed and RBI minutes from last meeting, which would be release late in the evening, and would provide some cues to the market.

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