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Below is the Daily Market Commentary 07 February 2022 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Domestic equities witnessed huge selling for third consecutive day with Nifty falling almost 400 points (-2.3%) intraday before closing the day with loss of 303 points (-1.7%) at 17,214 levels. Broader market too were down more than -1%. Except PSU Bank, all other sectors ended in red with Financial Services and Private Bank down more than -2% each. Volatility Index, India VIX surged 8.1% at 20.4 levels.

Global markets were mixed as investors feared that strong US jobs data could make the Fed aggressive in its monetary policy. While European markets cheered ECB status quo, BOE hiked rates to 0.5% to tame inflation.

Domestic Market has been witnessing heavy selling pressure post the Budget as the focus shifted back to interest rate, inflation, bond yields, and surging crude oil prices. FIIs have sold more than Rs4000 crore last week. It is important for the market to sustain above the 17,000 levels to witness some stability in an otherwise volatile environment. The forthcoming RBI policy meet on 9-10 Feb’22 will be an important event to watch out for and can further increase volatility in the near term. Traders can continue with ‘Sell on rise’ strategy.  The corporate earnings delivery is highly crucial and the Q3FY22 results so far has been decent providing some support to the markets.

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