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Below is the Daily Market Commentary 26th November 2021 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Domestic market opened gap down and witnessed sharp correction of ~3% after new highly mutated Covid-19 variant brought forward uncertainty over growth prospect. The indices remained in the bear grip throughout the day and ended the session near day’s low level – down almost 2.9%. Broader market too witnessed sell off in line with benchmark. Except for pharma – up 1.7%, all other sectors ended in sea of red down 2-5%. India VIX shot up by 24.8% to 20.8 levels - spiking above its multi months high levels signalling the dominance of bears in the market.

Global markets witnessed a sharp sell off as discovery of new and possibly vaccine-resistant coronavirus variant drove fears in investors. The new variant has put fresh mobility restriction in the infected zone, thus hindering the region’s economic recovery. Oil fell below $80 a barrel.

Domestic market has corrected ~9% from its peak as weak global cues, persistent selling by FIIs and premium valuation has made investors cautious. Going ahead market is likely to continue being under pressure till clarity emerges over how dangerous this new covid variant can be. Already market is precarious over timing of fed raising interest rate. With emergence of new, highly mutated Covid-19 variant and EU announcing temporary ban of flights from South Africa along with few EU countries already under full lockdown scenario, market sentiments have taken a big blow. In such a scenario, it is wise to grab the opportunity and invest in stock that are backed by strong fundamentals and sound management. Blue chip stocks which act as safe havens for investors, provides good entry point at lower levels to invest from long term perspective. Also one can look for defensive sector stocks.

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