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Below is the Daily Market Commentary 18th November 2021 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Equity market opened lower and witness selling pressure for third consecutive day on the back of weak global cues, concern over high inflation leading to hike in interest rates and continuous withdrawal by FIIs. Benchmark indices ended the session in red with Nifty falling 134 points (-0.75%) to 17,765 while Sensex was down 373 points (-0.62%) to 59,636. Broader market underperformed sharply with Nifty Midcap / Smallcap 100 down around 1.5% each. All the sectors ended in the red with auto and metal indices down more than 2% each, while IT & realty down 1.7%

India’s largest IPO of Paytm tumbled 27% on its maiden day, with investors questioning its business model and lack of profits along with lofty valuations. On the other hand, KFC and Pizza Hut operator Sapphire Foods opened with decent premium of 15% on its debut.

Global markets continued to show weakness as investors remained concerned over growing inflation and the impact it could have on monetary policy and growth outlook. On the domestic side, there is lack of any triggers after the end of the quarterly result season. FIIs have sold more than Rs6000 cr equities in November so far.

Overall market is in consolidation mode as valuations are rich despite good quarterly performance. 2QFY22 earnings came in above our expectations, led by a) cyclical sectors (such as O&G and Metals), b) improved asset quality in the BFSI sector, and c) strong topline growth in the Technology sector. However, global cues are keeping markets volatile – as inflation concerns have dominated headlines and the Fed starting the tapering programme soon. We expect the long term fundamentals of the market to remain positive and hence advice investors to keep accumulating quality stocks on declines. In the near term however, market may remain under pressure until fresh positive triggers appears.

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