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Below is the Daily Market Commentary 24th December 2021 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Domestic equity opened positive but selling at higher levels. Nifty fell by 246 points from its day’s high. However, Nifty managed to recover some of its losses and close just above 17,000 levels. Broader market underperformed with Nifty midcap 100/smallcap 100 down 1.0%/0.5% respectively. On the sectorial front, except for IT (+1%), all other indices ended in red with oil & gas, realty, PSU bank and auto down more than 1%.

European markets were positive while Asian markets were mixed in absence of investor participation and signs that the new Omicron variant is less dangerous. Markets in several countries including Germany, Italy, Spain and Switzerland, as well as the U.S. are closed on Friday for Christmas. Bourses in London and France were open for half day.

FII selling has reduced sharply over the last few days due to the festive holidays. After around 10% correction, Nifty is now trading at 19x FY23 P/E and is no longer in the expensive zone. While the relief rally might continue for some more time, volatility cannot be ruled out on account of potential risk from Omicron variant and fragile global cues. We suggest long term investors to take benefit of such volatility in the market and add on to their portfolios gradually at lower levels.

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