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Market commentary 20 March 2022 by Mr. Siddhartha Khemka, Motilal Oswal Financial Services Ltd.

Global as well as Indian equities rebounded from its previous day’s sharp fall after Chinese central bank slashed five-year loan prime rate by 15 basis points to 4.45% to stimulate economic activity. Sentiments were also uplifted in domestic markets after positive commentary from Finance Minister (FM) while addressing in 7th Annual Meeting of New Development Bank (NDB) and cues from its Asian peers. The FM said India's economic growth is likely to be robust at 8.9% in the current financial year, reflecting the country's strong resilience and speedy recovery.

Nifty opened gap up and gained strength throughout the session to finally settle with handsome gains of 457 points (+2.9%) at 16,266 levels fully erasing yesterday’s fall of 431 points. Broader market too ended in green with gains of more than 2%. All sectorial indices ended in green with Metals, Pharma and Media gaining more than 4% each. Metal indices rebound after their steep correction in nearly three months after China cut its key lending rates in the hopes of demand recovery. India VIX cooled off by 6% at 23.10 levels.

This week has seen sharp swings in the market in either direction with Nifty moving in 660 pints range. Nifty has managed to stay above 15,740 levels despite several days when it fell sharply. However follow up buying was also missing at higher levels with Nifty unable to sustain above 16,300 zones. Overall we expect this volatility to continue next week as well with several macro headwinds like high inflation and aggressive interest rate hike. Also heavy FII selling continued which added to the overall pressure in the market. We suggest investors to remain focused on selective stocks in the market which are resilient on the back of strong quarterly results and positive management commentaries.