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Daily market commentary 6th May 2022 By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Indian equities witnessed a sharp sell-off in line with global peers on the back of concerns over economic growth due to rising inflation. Further, higher bond yields as well as continued FIIs selling added to the overall pressure. Nifty opened gap down and stuck in a range to finally end the day with loss of 271 points (-1.6%) at 16,411 levels. Broader market underperformed with Nifty Midcap  100 down -1.8% while Nifty Smallcap 100 down -2.5%. All sectorial indices ended in negative territory with Realty being top laggard down more than 3%, followed by Metals, Private Bank, Consumer Durables and Financial Services. India VIX inched up by 4.7% to 21.3 levels, indicating high volatility likely to sustain in the next week as well.

Global markets tumbled 2-3% after Central Banks around the world aggressively raised interest rate to curb rising inflation, thus hitting economic growth. The Bank of England raised interest rates to their highest since 2009 at 1% percent on Thursday to counter inflation. Additionally, stringent lockdown in China have severely impacted global supply chains. Oil prices are also rising higher on persistent concerns over the tightness of global supply

Hawkish commentary and negative economic growth outlook by Bank of England spooked global markets. Nifty has fallen sharply by 9% from its April high of 18115. Also India VIX is again on rise near 21 zones which is giving discomfort to the markets and suggesting wild swings ahead. Investors would keep an eye on Reliance which would be announcing its Q4 numbers late Friday evening. Going ahead, domestic equities would continue to track global developments apart from the ongoing earning season for further cues.

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