IGI Logo

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

Domestic indices opened positive and traded sideways throughout the session. Nifty came off days high in mid-morning, however after witnessing minor sell off it reclaimed its positive stance and ended the session with gains of 67points (+0.4%) at 17,813 levels. Broader market mirrored the up move and settled with gains of ~0.5%. Among sectors buying was seen in Oil & Gas, Banking, Financial Services, FMCG, Metal, IT and Realty. While selling was seen in Auto, Media, Consumer Durables and Pharma.

Global markets were weak weighed down by disappointing European economic data and ahead of the release of key U.S. employment numbers for December. Also, investors continue to assess the impact of policy tightening by the U.S. Federal Reserve.

As we step into CY22, the focus of central bankers across the world has shifted towards inflation and monetary policy normalization post the pandemic given the context of US Fed Tapering and potential hardening of interest rates in CY22. Meanwhile, the third COVID wave has once again resulted in imposition of some state-level restrictions. While this wave, so far, seems less severe in terms of mortality and hospitalization, one needs to watch out for the trend and reactions of both the state and central governments in the next few weeks.

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. We remain optimistic and expect Nifty to deliver around 12-15% returns in 2022, supported by continuation of economic recovery and strong earnings growth.

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