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Daily market commentary 05 August 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Domestic equities were trading positive despite weak global markets, supported by acceleration in service PMI data for the month of August.  Nifty opened flat but immediately gained strength and retained its momentum throughout the session to close near day’s high with gains of 126 points (+0.7%) at 17666 levels.

Today US market will remain close on account of Labour Day. Asian and European markets were trading with weakness after U.S. jobs data raised the prospect of steep interest rate hikes by the US Fed. Further, Russia announced to shut one of its supply pipelines to Europe indefinitely which dented the sentiments

Nifty continues to outperform its global peers on the back of strong macro data, upcoming festive season and FIIs inflows. Mid and smallcaps continue to remain in Momentum with niche sectors like hotels and media in focus. Also Metals, Private Banks and Auto Ancillaries were also in action today. Auto Ancillaries are seeing buying interest as healthy August auto sales and easing chip shortage issues improves the outlook for the sector. Going forward, Nifty is likely to continue trading sideways in the absence of any major events domestically. Globally, nine central banks would meet this week for their policy announcement while the new UK Prime Minister would also be announced, which could drive the global markets in the near term.

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