IGI Logo

Daily market commentary 14 July 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Domestic equities were volatile amid weak global cues and index weekly expiry. Nifty opened with minor gains but failed to sustain above 16k levels on back of profit booking. However, decline in India’s WPI to 15.18% in Jun’22 from 15.88% in May’22 provided some relief with Nifty ended the session with loss of just 28 points at 15,939 levels. Broader markets were mixed with Nifty Midcap 100 down 0.1% while Nifty Smallcap 100 fell more than 1%. Among sectors Oil & Gas, Consumer Durables, Pharma and Auto are positive. While IT, PSU Bank, Realty, Metals, Financial Services were under pressure.

Global Markets continued to remain under pressure after the US inflation further deteriorated to 9.1% in June and continued to remain at four-decade high. Sentiments were also affected after IMF warned that it may cut its global growth forecast amid uncertain global environment.

Domestic equities have been under pressure for fourth consecutive day as investors remained cautious with US inflation inching up further in June and risk of a sharper rate hike by Federal Reserve. While Monsoon progress has been good, the results season has been weak with only IT companies reporting their numbers so far. Rupee continued to remain under pressure and crossed the 80 mark due to continued FIIs selling. In the meantime, many commodity prices have cooled off 30-40% in recent weeks, thus providing relief to the FMCG sector. Even crude prices fell to below $100/barrel which if sustains is positive for sectors like Paints, FMCG, Cement, Tyre, Aviation etc. Auto sector stocks have been in momentum on back of softening input costs. Pharma stocks are also witnessing fresh buying on account of sector rotation and attractive valuations.

Above views are of the author and not of the website kindly read disclaimer