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

Equity markets opened positive and after a range-bound movement in the first half of the session, gathered momentum, to end near days’ high with strong gains of 1.5%. Broader markets too participated in the rally with all sectors ending in green. Realty gained the most post strong Mumbai registration data for the month of October which was the decadal best performance and robust earnings reported by real estate companies. Metals too outperformed post stellar results by SAIL. Positive global trends, buoyant PMI data and GST collections too boosted investor sentiments.

Global cues were positive on the back of optimism about economic recovery despite mixed China’s factory activity data and caution ahead of US Fed’s MPC.

Today’s rally provided relief to the investors post recent sell-off. Good earnings season and strong macro data uplifted confidence with regards to economic recovery. Corporate commentaries continue to remain upbeat, with managements across sectors alluding to strong demand trends. With the economic cycle picking up, we expect the corporate earnings growth to revive which has been lacking for many years now. We estimate Nifty EPS to grow at 35%/20% to INR730/INR874 for FY22E/FY23E, respectively. Thus the long term fundamentals remain intact and one should adopt bottom-up strategy, as we expect stock/sector-specific momentum to continue. Due to the festival of Diwali, markets will have a  truncated 3 day trading session this week. All eyes would be on US Fed meeting which will provide some direction to the market.

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