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Below is the Daily Market Commentary 03 June 2022 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Domestic equities opened positive on back of strong service PMI data. Services PMI in May expanded to 58.9 in May, strongest rate in over 11 years. However, depreciation in Rupee and rising bond yields dampened the sentiments. Nifty opened higher but pared all its gains in last half hour and ended the day with minor loss of 43 points at 16584 levels. Broader market underperformed with Nifty Midcap 100 down -1.6% and Nifty Smallcap 100 down 0.9%. Except for IT, all other sectorial indices ended in red with Auto, Metals, Media and Banking down more than 1% each.

Global markets were mixed ahead of release of U.S. jobs data for May.

Markets base is gradually shifting higher despite witnessing selling pressure at every rise. Nifty opened gap up and headed towards 16,800 zones. Although it closed lower it still managed to stay above the crucial support of 16,400 which should act as a strong base for the market now. Persistent worries on rising interest rates, elevated crude oil prices and liquidity tightening are however keeping the upside in check. Markets are likely to remain in a broader range as we continue to monitor global cues including geo-political developments, crude oil price movement as well as institutional flows. RBI’s monetary policy meeting next week will be a key event that will be tracked by investors.

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