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Daily market commentary 02 August 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Domestic equities witnessed increased volatility and closed flat amid weak global cues. Nifty opened soft but buying in the last hour wiped off some of the losses to help it close with minor gains of just 5 points at 17,345. Broader market closed in green with Nifty Midcap 100 up +0.3% and Nifty Smallcap 100 up +0.7%. Sector-wise it was a mixed bag. PSU Banks, FMCG, Auto, Consumer Durables were top gainers. While Realty, IT, Metals and Financial Services were laggards. PSU Bank were in flavour today on the back of good results, positive management commentary and privatization of PSU Banks to be tabled in Monsoon session

Global markets were trading lower after US and China reported weak manufacturing PMI data. Sentiments were also hampered amid geopolitical concerns between Taiwan, China and the United States.

Nifty saw a smart rally of almost 1000 points (5.8%) in the last 5 sessions. It almost wiped out the entire decline for the year till date supported by healthy corporate earnings and strong macro data. 1QFY23 Profits for the 31 Nifty companies that have declared their results so far, rose 12% YoY, single-handedly driven by BFSI. As the benefit of the recent softness in commodity costs start accruing in 2HFY23, we expect other sectors to start contributing as well. We now expect markets to consolidate in near term on back of fresh geo-political concerns and sharp rally witnessed in a short span of time.

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