IGI Logo

Below is the Daily Market Commentary 1st December 2021 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Equity markets opened gap up and maintained their momentum throughout the session, following the recovery in global markets and strong domestic GDP data. Both the indices ended the session with gains of 1%. Except pharma, all other sectoral indices ended in the green with Metals and PSU bank up more than 2%.

Indian economy clocked a healthy growth rate of 8.4% in 2Q FY22 returning to its pre-covid levels. However we continue to believe that consumption may remain weak in the coming quarters as a result of a weak household sector. We estimate in a real GDP growth forecast of 5-5.5% YoY in 2H, leading to a growth of ~9% YoY in FY22, which is only 1% higher compared to FY20 levels. Also GST collections jumped to over Rs 1.31 lakh crore in November, the second highest since its implementation in July 2017, in line with the trend in economic recovery. The seasonally adjusted PMI rose from 55.9 in October to 57.6 in November.

Global markets turned positive after investors shrugged off concerns over Omicron and shifted focus towards positive economic growth. The sharp sell-off have also made many stocks attractive and thus investors tapped into this opportunity to buy into dips.

Going ahead, we expect the market to continue with its volatility given the uncertainty around the new Omicron variant and Fed tapering. However sharp sell-off have made valuations comfortable and the economic data points continue to point towards economic recovery thus keeping long term fundamentals intact. We would thus advise investors to buy in this volatility in staggered fashion.

Above views are of the author and not of the website kindly read disclaimer