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Below is the Daily Market Commentary 05 January 2022 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Domestic market opened on a flat note. However, later Nifty resumed its upward journey and reclaimed 17,900 mark. The index finally ended the session with gains of ~120 points (+0.7%) at 17,925 levels. Sensex closed 367 points up (+0.61%) at 60223 levels. Broader market ended on mixed note with Nifty midcap 100 up 0.2% while Nifty Smallcap 100 down by -0.3%. Among sectors, Banking and Financial service sector were up ~2%, followed by Metal, Oil & Gas, Realty and Auto. While IT was down nearly 2%, followed by media and pharma. 

Global markets remained on subdued note as U.S. Treasury yields rose higher as investors await the 
minutes from the U.S. Federal Reserve’s latest meeting for clues on the central bank’s interest rate hike moves. Most of Asian markets closed in red while Europe is trading in green.

We remain optimistic and expect Nifty to deliver around 12-15% returns in 2022, supported by continuation of economic recovery and strong earnings growth. After the recent correction, Nifty is now trading at ~20x 12 month forward PE which is no longer in the expensive zone. While the market trend might be volatile in the near term on account of potential risk from Omicron variant, upcoming budget and fragile global cues, in the long run, strong earnings delivery along with positive macro-economic data would hold the key to drive markets upwards.    

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