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Below is the Daily Market Commentary 3rd December 2021 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services

Equity markets opened positive but erased all its initial gains to end near days’ low, turning cautious as India starts reporting Omicron cases. Broader market outperformed and ended the day flat to positive. Thus, despite the 1.2% fall in Nifty, the overall market breadth was in favour of advances with advance-decline ratio at 5:4. Sector wise, barring media which was up 1.7%, rest all the sectors were in red with Financial services, Pharma, Oil & Gas and FMCG down 1%. On a weekly basis, markets snapped its 2-week loss to end with gains of ~1%.

Most global markets edged higher ahead of the release of important U.S. nonfarm payroll data which is expected to show a drop in the unemployment rate. However, possibility of more COVID-linked activity restrain and an accelerated pace of stimulus tapering by the U.S. Federal Reserve had curbed the upside.

Going ahead, market volatility is likely to continue given the uncertainty around the new Omicron variant and Fed tapering. Till the clarity doesn’t emerge over its rate of transmission, hospitalization needs, etc, news flows around it would keep markets unpredictable. On the other hand, investors would keep an eye on RBI’s policy decision due next week wherein status quo is likely to be maintained amidst reappearance of Covid variant. However, the correction has made valuations comfortable and given the robust long term fundamentals, investors are recommended to indulge in value buying from time to time.

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