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Below are Quote on Daily Market Commentary 30 November 2021 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Equity markets opened flat but witnessed good pull back in the initial part of the session, though later it gave up all its gains and remained range-bound to finally close in red with loss of 70 points in Nifty. Broader markets however outperformed and close in green. Sectorally it was a mixed bag with Consumer Durables outperforming – gaining more than 2% while Metals underperformed – down ~2%.

Global markets remained weak over concerns about the effectiveness of current vaccines against this new Omicron variant. Sentiments got charred following Moderna statement that existing Covid-19 vaccines would struggle to cope with the omicron variant, predicting a ‘material drop’ in their effectiveness. The new variant has now spread to more than a dozen countries around the world, thus, prompting the introduction of new travel curbs. Crude prices too came under pressure as the omicron concerns returned, with investors worried about fresh lockdowns and its impact on global demand.

Going ahead, we expect the market to witness higher volatility in the near term given the uncertainty around the new Omicron variant. As the clarity would emerge over the next few weeks with regards to its transmission, impact on hospitalization, mortality, etc, the market direction would be decided in due course. Till then Travel, Tourism, Hospitality, and Retail are some of the segments which are likely to underperform. Even sectors/stocks exposed to markets with rising COVID-19 cases/greater prevalence of the Omicron variant may underperform. We expect sector rotation to defensives like Pharma, IT, and Consumer till sentiments improve. However, Nifty valuations post correction at ~20x FY23E EPS is relatively more reasonable now and thus would advise investors to buy in this pullback in staggered fashion.

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