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

Equity markets started on a positive note but gave up all gains during the latter half of the day to end almost flat, snapping its 2-day fall. Nifty rose 18 points (+0.1%) to close at 14,956, while Sensex gained 36 points (+0.1%) to end at 50,441. The broader too gained with Nifty Midcap 100/Nifty Smallcap 100 up +0.3%/+0.5%. Sectorally it was a mixed bag with PSU Banks (+1.6%), Energy (+1.1%) and Media (+1.0%) being the biggest gainers. IT, Pharma, Metals, and Infra gained between 0.4-0.8%. Realty was the biggest loser – down -1.1%, followed by Auto, Financials, and FMCG which lost in the range of 0.2-0.5%.

Global cues were mixed as positive sentiments around better than expected US payroll data was offset by inflationary concerns post US Senate’s passage of a $1.9 trillion stimulus bill. Even sharp jump in Brent crude oil price, which was above the $70 per barrel-mark concerned the market. On the domestic side, Nifty ended the volatile session on a flat note but managed to close higher after declining in the previous two sessions. Oil and gas stocks were in traction today after crude futures surged to above $70 per barrel post an attack on the Saudi Arabia oil production facilities. UPL, GAIL, L&T, ONGC and HCL Tech were among the top gainers, while losers included Bajaj Finance, UltraTech Cement, IndusInd Bank, Shree Cements and Bajaj Auto.

Technically, Nifty formed a small Bearish candle on daily scale with long upper shadow which indicates limited upside with absence of direction. Now, it has to cross and hold above 15000 to witness an up move towards 15150-15250 while on the downside immediate support exists at 14800-14700 levels. India VIX fell down by 3.5% to 24.67 levels. VIX is turning highly volatile in broader range of 21.80 to 29.64 from last ten trading sessions. Cool down in VIX below 21-20 zones is required for bullish grip.

While the long term structure of the market continues to remain positive, it may face some hurdles in the near term due to concerns over the bond yields, commodity prices and risk of increase in inflation. Investors would also track India’s import/export data along with bank’s loans and deposit growth data for further cues.

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