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Below is the Daily Market Commentary 26 August 2021 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

“Equity markets opened flattish and remained so for the entire day. Despite being the August F&O Series expiry there was no signs of volatility. Both Nifty and Sensex were flat on closing having moved just 2 points /5 points to end at 16,637 / 55,949 respectively. Broader market faired marginally better, continuing its positive streak for third consecutive day with Nifty Midcap 100/Nifty Smallcap 100 gaining +0.2% each. Sectoral trend were mixed. Oil&Gas (+0.8%), Consumer Durables (+0.6%), FMCG (+0.6%) Energy (+0.6%) were among the major gainers. Metals (-1.3%), Media (-1.2%), PSU Bank (-0.8%), Pharma (-0.5%), Auto (-0.5%) were seen on the losing side. As said earlier, volatility was absent on the monthly derivatives expiry day – up 0.3% from 13.49 to 13.53 levels. Cool down in Volatility from recent highs has again given some strength to the market and now VIX needs to go below 12 zones to get more buying interest in broader market.

Technically Nifty formed a similar to Doji candle on daily scale as it closed near its opening levels and negated its higher highs - higher lows formation of the last three sessions. Now it has to continue to hold above 16600 zones to extend the move towards life time high territory of 16700-16750 zones while on the downside support is seen at 16500 and 16380 levels.

Globally US markets continued to touch new highs propelled by Tech and financials even as investors await for more clarity on monetary policy from US Federal Reserve at the ongoing Jackson Hole Symposium. On the domestic front, market was direction less due to lack of triggers. The result season is over with better than expected delivery and vaccination drive going on in full swing. However after sharp outperformance in the past 18 months led to concerns on valuation front and the likely impact on liquidity due to changes in global monetary policy had investors concerned over the last few days. Hence we had seen market interest shifting away from mid-caps to large caps. While mid-caps have started participating in the market up move in the last couple of days we believe that large caps offer better margin of safety in the current environment and could continue to remain in focus in the near term as well. From the long term perspective, the overall trend of the market remains positive led by the opening up of the economy, improving economic data points and pickup in vaccinations.“

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