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Below is the Daily Market Commentary 29 September 2021 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

Equity markets opened gap down amidst weak global cues but witnessed smart recovery in latter part of the session to end with marginal losses. Buying interest was seen in power, metal, realty, PSU Bank and pharma sector which added 1-3.5%. However, broader market outer-performed benchmark, with Nifty midcap 100 up 1% while smallcap 100 up 0.4%. The Prime Minister-led Cabinet has approved Rs4,400 crore investment in Export Credit Guarantee Corporation Ltd (ECGC) in the next five years to provide support to exporters as well as banks. The Union Minister has given go ahead for its IPO. Which would boost India’s export. The country has exported goods worth $185 billion, which is the highest in the history of India in the first six months. The government has given special focus to export in past one year.

Global cues were weak on concern over rising U.S. Treasury yields, deepening concerns over persistent inflation, and contentious debt ceiling negotiations in Washington. However the dollar eased a little as yields stabilized leading to rebound in US futures. Even oil prices dropped from three-month highs after a surprise rise in U.S. stockpiles. European markets too stabilized though concerns remained as inflation pressure rises further.

Markets are likely to continue with its consolidation given the sharp run-up in the past few weeks and weak global cues. All eyes would be on US treasury yields, global energy prices and the ongoing debt ceiling debate in US which would provide market direction in near term. Tomorrow monthly F&O expiry could also keep the market volatile. Markets are increasingly witnessing rotation from outperforming sectors to under-valued stocks. Lot of stock specific and sector specific action is being witnessed in the market, thus traders should trade accordingly. On the other hand, the volatility is giving opportunity to investors to accumulate good names on dips. The domestic sentiments remain positive as the Covid cases continues its decline further (daily cases falling to below 20k) resulting in more relaxation of economic activities with Key state Maharashtra opening up from October.

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