IGI Logo

Below is the Daily Market Commentary 02 February 2022 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Domestic equities opened gap up on back of positive global cues and progressive budget, with Nifty rallying towards 18k mark. The indices remained in bulls grip throughout the day and closed with gains of 203 points (+1.2%) at 17,780 levels. Broader market mirrored the gains and were up ~1.3%. All sectors ended in green with PSU bank up 3%, followed by Private bank up more than 2%, while majority of the sectors were up between 1-2%. India Vix cooled off by 6.7% at 18.65 levels.

While markets in mainland China, Hong Kong, Singapore and South Korea are closed today for the Lunar New Year holidays, other markets globally were stable on back good earnings and lack of any other major triggers.

The budget overall was a balanced one with no unpleasant surprises. While there were some disappointments on the absence of measures to improve consumption, economic recovery in FY23 coupled with vaccination progress would continue to drive demand recovery ahead.

Given the continuity of policy focus and pronouncements, we believe markets will discount the budget and shift focus to: a) rising interest rate regime globally and consequent higher bond yields and b) corporate earnings growth that has remained resilient so far in the ongoing 3QFY22 earnings season. The forthcoming RBI policy meet on 9th Feb’22 assume greater significance now with respect to the future of liquidity and interest rates. Q3FY22 earnings has been good so far and from management commentary Q4 number is expected to be strong. Overall we remain positive on the market. From a sector perspective, we expect Infra, construction, cement, capital goods, affordable housing, logistics and Defence to remain in focus. 

Above views are of the author and not of the website kindly read disclaimer