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Below is the Daily Market Commentary 19 May 2022 2022 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Indian equities witnessed a sharp selloff on the back of weak global cues. Even minutes from RBI’s meeting suggested more hawkish tone for its forthcoming MPC meeting in June. Nifty opened gap down and remained under pressure throughout the session to finally end with loss of 431 points (-2.7%) at 15,809 levels. Broader market too witness sharp fall with Nifty Midcap 100 down (-3%) while Nifty Smallcap 100 down (-2.7%). All sectorial indices ended in negative territory with IT & Metals being the worst – down between 3-5% each. India Vix shoot up by 10% at 24.56 levels

Global markets tumbled 2-3% as investors remained anxious over widespread inflation and a potential global economic slowdown post UK’s inflation data. The UK inflation accelerated to 9%, highest level in 40 years as Russia’s war in Ukraine fuelled further increases in food and fuel prices.

Rising inflationary pressure, continuous FIIs selling and rupee depreciating to all time low have turned investors pessimistic in the near term. After a minor pause, sharp selling was again seen in the market and it was unable to hold at higher levels. Rising VIX is further giving discomfort and suggesting wild swings ahead. Nifty has broken its key support levels and till it is below 16,000 - weakness may continue towards 15,500.

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