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

Equity markets opened flattish and remained consolidative throughout the session; finally ending in marginal red. Nifty fell 39 points (-0.3%) to close at 14,835 while Sensex ended 155 points (-0.3%) lower to end at 49,591. Broader markets outperformed with Nifty MidCap 100/Nifty Smallcap 100 ending with marginal gains - up +0.2%/+0.5% respectively. Sectorally it was a mixed bag with Pharma being the biggest gainer - up 3%, followed by PSU Banks (+2.1%). FMCG, IT and Media also gained +0.8% each. On the other hand, Private Banks/Financials fell -0.9%/-0.7% while Energy was down -1.1%. Infra, Metals and Realty closed 0.6-0.7% lower while Auto fell -0.4%.

Global cues were weak after the bond yields edged higher. Domestically, Nifty snapped three-day gaining streak as sentiments were dampened on account of rising corona virus cases and reports of vaccine supply crunch. The country reported 131,968 new infections and 780 deaths on Friday - the biggest daily increase since mid-October. The top performers in today's session were the Pharma stocks which ended with gains of 3% on account of rising demand for medicines due to rising Coronavirus cases. PSU Banks gained 2.1% post the media reports that the senior officials are set to meet on April 14 to discuss the potential candidates for privatisation. Nifty Metal index snapped a nine-day rally, ending 0.6% lower. However, the index advanced 6.6% on a weekly basis, its third straight weekly gain. IT stocks remained in focus ahead of results next week. Cipla, Sun Pharma, HUL, Tech Mahindra and Wipro were among top gainers on Nifty, while losers included Bajaj Finance, UPL, Tata Steel, UltraTech Cement and NTPC.

Technically, Nifty formed a Doji candle with long lower shadow on weekly while a small Bearish candle on daily scale indicating buying at lower zones. Now, it has to decisively cross and hold above 14880 zone for an up move towards 15000 and 15100 zones while on the downside support exists at 14750 and 14650 levels. India VIX fell down by 2.58% from 20.31 to 19.78 levels. Lower volatility and a hold below 20 zones could continue to keep buy on declines strategy in the market.

Going ahead, Indian markets are likely to track global cues along with the weakening rupee which has depreciated more than 2%. Lot of stock specific action is likely to be witnessed as the earnings season would kick start from next week. We expect Q4 to be another strong quarter, aided by a deflated base of 4QFY20 and healthy demand recovery for the large part of 4QFY21. Performance is expected to be healthy despite headwinds of commodity cost inflation in various sectors. However concerns over the fast spreading 2^nd wave of Covid in India along with vaccine supply crunch continues would keep the markets volatile. Next week investors would also keep an eye on India’s CPI data.

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