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

Indian equity markets witnessed extreme volatility on the last monthly F&O expiry of FY21. Index opened positive but failed to hold on to higher levels. Index tried to recover in the latter part of the day, but that was short lived and index settled the day with losses of more than 1.5%. Nifty fell 225 points (-1.5%) to close at 14,325, while Sensex plunged 740 points (-1.5%) to 48,440. The broader markets too nosedived with Nifty MidCap 100/Nifty SmallCap 100 down -2.0%/-2.2%. Except Metals (+0.02%), all the other sectors ended in red. Media (-3.1%), Auto (-2.8%) and PSU Banks (-2.6%) were the major losers while realty, FMCG and IT fell 2.2-2.5%%. India VIX remained high up by 1.06% from 22.45 to 22.69 levels. Cool down in VIX below 20 is required for bullish grip and smoother move in the market.

Global cues continued to remain weak in lieu of the fast spreading Covid cases in Europe. Even US markets were in red as investors continued to pull back from the technology stocks. On the domestic side, all round selling in the market continued for second day in a row. Banking and Auto stocks recorded sharp decline. Weak global cues along with worries over 2^nd wave of Covid in India led to sharp fall in the market. India reported the biggest spike in Covid-19 infections in five months at a time experts found a new "double mutant variant" of the virus in the country. Technically, till Nifty remains below 14550 zones, weakness could be seen towards 14200- 14000 zones while on the upside hurdles are seen at 14675- 14800 zones.

The market may remain under pressure in the near term amidst weak global cues, and fast spreading 2^nd wave of covid in India, which could impact the pace of economic recovery. High commodity prices too is a concern and till it cools off substantially the fear of inflation would continue to loom. Given the likelihood of high volatility continuing in the market for some time, investors would do well by staying calm and gradually accumulating good quality companies on declines in the market.

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