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Daily market commentary 11 August 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Global as well as domestic markets gained strongly post soft US inflation data. Nifty opened gap up and maintained its momentum throughout the session to finally close with healthy gains of 106 points (+0.6%) at 17,640 levels. Broader market too rallied with Nifty Midcap 100/Nifty Smallcap 100 up +0.9% each. Majority of the sectors gained with Banks, IT and Realty being top gainers. While FMCG, Auto and Media, were being losers.

Softened US inflation data boosted investor sentiments and led to hope that the US Fed might taper down its aggression and raise interest rates at a slower pace than previously expected. Commodity costs have corrected over the last few weeks, offering some respite to the record high inflation. Even India’s inflation data is due on tomorrow (Friday) which would be eyed eagerly amidst better US inflation data. The benefit of the recent moderation in commodity costs is likely to start accruing in 2HFY23E, which would boost corporate profitability. Thus the positive momentum in the market is likely to sustain going ahead, though bouts of volatility can’t be ruled out given mixed global cues and increasing geopolitical tensions.

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