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Daily market commentary 19 July 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Domestic equities gained momentum despite cautious global environment. Nifty opened lower but made a smart recovery to close near day’s high with gains of 62 points (+0.4%) at 16,341 levels. Broader market outperformed with Nifty Midcap 100 up 0.7% while Nifty Smallcap 100 up 1%. Sector-wise PSU Bank, Realty, Auto, Private Bank, Financial Services, Consumer Durables and Metals were gainers. While Media, Pharma and Oil & Gas were laggards.

Global markets were mixed ahead of the latest European consumer inflation data due later on Tuesday and ECB meeting on Thursday. US Dollar Index edged lower by 2.5% from the high (109.29) made last week after US Fed officials favored 75bps rate hike as compared to a 100 bps rate hike.

Indian markets are standing out amidst global volatility. The energy crisis seems to be coming back with Saudi Arabia declining to increase production and Russia cutting gas supplies to Europe. On the other hand, dip in Dollar index from its highs have supported emerging markets. On the domestic side, strong momentum seen in rural focused stocks with healthy progress in monsoon. Even PSU Bank were in lime light after government announced delisting of 2 public bank. Midcap stocks have seen sharper recovery with improvement in sentiments and value buying. Going forward, market setup is positive with the overall structure changing to ‘Buy-on-dips’ from earlier ‘sell-on-rise’. With ongoing result season picking up pace, stock specific action is likely to continue.

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