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Below is the Daily Market Commentary 16 September 2021 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

India equities opened positive and gradually gained momentum to touch yet another new high; finally closing near day’s high. Both Sensex and Nifty breached 59000/17600 mark to close at 59141/17629 levels. Despite weak global cues, introduction of PLI reforms for telecom and Auto sectors led to the rally, giving confidence to the investors about the reform led economic recovery. Though the rally was broad based, PSU Banks showed stellar performance – up over 5% ahead of Finance Minister’s press briefing on Bad Bank. In fact, Bank Nifty hits record high today, breaching its previous high of Feb’21. 

Global cues continue to be weak as investors remain cautious due to worries over global economic recovery, weak Chinese data and focus on key U.S. data (retail sales and weekly jobless claims) due later in the session.

The market might be volatile on account of fragile global cues, on worry over slower economic growth and rising Delta variant cases globally. Investors are cautious ahead of next week’s Federal Reserve meeting, awaiting indications on when the central bank will start withdrawing its monetary stimulus and start raising interest rates eventually. Valuations too are rich and hence could lead to bouts of profit booking. But the overall sentiment in the domestic market remains optimistic, given continuous improvement of macro data points and positive earnings expectation. Controlled Covid cases domestically and strong pick up in vaccination drive, has led to healthy pick-up in economic activities. Further the PLI schemes announced by the government so far shows their strong intent to address the sectors’ challenges and pave way for development of local capabilities and capacities, thus enabling companies to rightly capture the opportunity thrown open by China+1 strategy.

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