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Daily market commentary 12 August 2022 by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Global as well as domestic indices saw a lackluster movement after US Fed official commented that they would continue its hawkish rate hikes until data show further slowing in inflation. Nifty opened flat and after initial blip, recovered and traded in positive territory throughout the session to finally close with marginal gains of 39 points (+0.2%) at 17698 levels. Broader market too ended in green with Nifty Midcap 100 up +0.7% while Nifty smallcap 100 was up +0.3%. Sector wise it remained mixed bag with Oil & Gas, Metals and Realty being top gainers up 0.7% - 2% each. While IT, Pharma and Media were top laggards down more than -1% each. India Vix cooled off by -3.8% at 17.7 levels. Nifty metal index advanced more than 1% due to fall in global inventory and increased demand.

Nifty has rallied by more than 2500 points from June lows, and thus, has wiped out the entire decline for the calendar year till date and turned positive. Strong macro data, FII turning positive, steady earnings and healthy progress in monsoon have been some of the key factors supporting the market. Infact FIIs have been continuous buyer throughout the month of August so far, thus driving rally in the market. Softening of US inflation has further boosted market sentiments though Fed’s hawkish stance is a cause of worry. Investors would now await India’s inflation data that is due later today for future direction. Though the overall momentum is positive,  market may take a pause over here and consolidate after the recent sharp rally. However, stock Stock specific action would continue as we are in the last leg of results season

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