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Below are Quote on Daily Market Commentary 07 July 2021 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Equity markets opened flat despite weak global cues and remained range bound for the first half of the session, but buying interest in the latter half led the benchmarks close in green near days’ high. Nifty/Sensex gained 61/194 points (+0.4% each) to close at 15,880/53,055. Sensex for the first time closed above 53k mark. Broader market too ended on a positive note with Nifty Midcap 100/Nifty Smallcap 100 up +0.7%/+0.6% respectively. Among sectors, except for Auto, Energy and Media which were down marginally, all other sectors ended in green. Metal (+2.2%) was the top gainer, followed by realty (+2%). Financials, Banks, FMCG, Pharma and IT gained 0.3-0.6%. India VIX, the volatility index, ended lower by 0.5% at 12.21 levels.

Global cues were weak as US 10-Year G-Sec Yield fell to 5-month low of 1.35% while investors awaited out-come of the FOMC minutes. Domestically, Nifty ended on a positive note despite weak global cues and was largely led by stock specific action. Sentiments were positive on account of receding pandemic cases, vaccination progress, strong May core sector data, improved traction in overall economic momentum in June indicating healthy corporate earnings for Q1. Robust pre-quarterly updates from Sobha, Titan, RBL Bank, Equitas among others also cheered the market. Fresh buying was seen in metals after tata steel reiterated its focus on capacity expansion in India. Realty stocks too surged led by signs of recovery for demand in residential real estate as unsold inventory declined further in Q2CY21. Tata Steel, JSW Steel, Bajaj Finserv, Hindalco and UPL were among the top gainers on the Nifty. Top losers were Titan Company, ONGC, Maruti Suzuki, SBI Life Insurance and Shree Cements.

Investors today await outcome of FOMC meet on the global front while domestically, upcoming cabinet reshuffle of the central government would be the key event to watch out for. Further Q1FY22 earnings season would kick start from tomorrow (8^th July) with TCS results and would thus provide some direction to the market as it would offer cues with regards economic revival. Since restrictions this time around was localized and less stringent v/s the lockdown in CY20, we expect the impact in 1QFY22 to be contained. We expect earnings momentum to accelerate in FY22 as the pace of vaccinations picks up and the economy opens up further. However, the potential risk from Covid third wave continues to loom. Consistent earnings delivery v/s expectations are critical for further outperformance in our view.

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