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Below is the Daily Market Commentary 11th January 2022 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Domestic indices opened positive after taking cues from its global peers. Nifty witnessed volatility in the initial trade but recovered from its lower levels and ended the day with gains of 52 points (+0.3%) at 18,056 levels. Broader market too ended in green with minor gains of ~0.1%. Among sectors, buying was seen in the IT, realty, oil & gas and financial services. While selling was seen in Metals, Auto, FMCG, PSU Bank and Pharma.

Majority of the global markets were positive helped by strong European economic data. U.K.retail sales grew by 4.6% in December y-o-y. Another report from Barclaycard showed consumer spending was up 12.2% last month from two years before. Even Australia released better-than-expected retail sales data.

Investors continue to monitor the impact of central bank’s tightening of their monetary policies and the spread of the omicron COVID-19 variant. In the previous two decades, there have been two periods when the Fed has raised interest rates (Jun’04-Jun’06) and (Dec’16-Dec’18). The Nifty has performed well in those two periods, despite rate increases by the Fed. Going forward we expect market to remain steady on back of expectation of strong corporate earnings  season, upcoming budget and positive macroeconomic data. The key risk in the near term might be any changes by government in restriction norms due to rising cases.

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