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

Nifty opened positive but soon witnessed profit booking amid weak global cues and SEBI warning over midcap-smallcap rally. The index closed near the day’s low with a loss of 161 points (-0.7%) at 22333 levels. Broader markets especially smallcap bore the brunt and was down 2%. Barring Healthcare, all sectors ended in red. Market has turned cautious ahead of key inflation data from India and the US this week. Further, Japan’s GDP increased by 0.1% in Q4CY23, vs -0.1% in Q3CY23, which raised speculation that the Bank of Japan is likely to increase its interest rates and discontinue its ultra-loose monetary policy. On the domestic front, sentiments dampened after the SEBI Chief highlighted irrational run-ups and expensive valuations in small and midcaps. Also, Stress test disclosures for small and midcap funds are to be announced on March 15. This is likely to keep the pressure on the broader market in the near term. Going ahead, we expect the consolidation to continue in the market with large bouts of volatility. We recommend switching to large caps where the risk-reward is more favourable.

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