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Below the Daily market commentary by Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

After sharp selloff yesterday, Nifty saw a smart recovery from lower levels and closed with handsome gains of 149 points (+0.7%) at 22147 levels. Broader market saw a relief rally with the Nifty midcap up 2% and the Nifty smallcap 100 up 3%. Barring private bank and financials, all sectors ended in the green. Oil & gas, Metals, Pharma, and Consumer Durables gained 1-2%. India’s WPI inflation eased to a four-month low of 0.2% in February which added to the market momentum. Further, rating agency Fitch estimates India’s GDP to grow at 7.8% in FY24E, boosting the sentiments. Markets, especially midcap and smallcap will take direction from tomorrow’s important event i.e. outcome of the MF stress test. Also, investors would track the key data points (Core Retail Sales and PPI data) from the US. We expect broader market volatility to continue in the near term, thus, retail investors should take this correction as an opportunity to accumulate quality names in 3-4 tranches. We suggest to make a higher allocation towards large caps as valuations are comfortable along with steady growth prospects.

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