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

Equity markets closed positive for the fourth consecutive session amidst drop in Covid cases. Nifty/Sensex rose 119/296 points (+0.8%/+0.6%) to close at 14,942/49,502. The broader markets too gained with Nifty MidCap 100/ Nifty Smallcap 100 up +0.9%/+1.5%. All the sectors closed in green, with Metals continuing with its stellar performance - gained +3.1%, followed by Pharma (+2.8%) and Media (+2.5%). Auto, PSU Banks, Energy and Infra gained 1-2% while Private Banks, Financials and Realty 0.5-1%. FMCG and IT on the hand ended flat to marginal positive.

Global cues were positive in hope that the interest rates will remain low and the economies will continue their recovery. On the domestic side, Nifty cheered drop in daily Covid cases which provided hope of tapering down of second wave. Even healthy results so far is providing support to the market. Though many states have extended lockdown and some corporates have curbed production/ commercial activities, market seems to be ignoring all. Metals continued with its rally as iron ore futures and copper prices hit record highs amidst surge in demand. Even Pharma rallied on the back of strong IPM growth for the month of April led by huge demand for Covid drugs and low base of last year.

Going forward, markets are likely to remain range bound in the absence of fresh trigger. Resurgence of the second COVID wave has dented sentiments and weakened FY22E earnings visibility. Management commentaries from the on-going 4QFY21 earnings season clearly indicate that demand would moderate, especially post the second half of April. Thus earnings downgrades are increasing vis-à-vis upgrades. However, the market is looking beyond this near-term weakness and has been resilient so far. We believe, the interplay of resurgence in COVID-19 cases and the pace of vaccination would decide the trajectory of economic recovery going forward.

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