Post Market views - Dec 14, 2021 - Mr Mitul Shah, Head Of Research at Reliance Securities

The profit booking continued in with the Nifty falling by 0.4% in a volatile market impacted by negative sentiments from other Asian markets due to renewed concerns about Covid-19, as India confirmed 40 cases of Omicron and one death in UK due to Omicron. The broader market outperformed the main indices, NSE Mid-Cap down 0.3% while Nifty Small cap is more or less flat. Sectors like Nifty Media, Pharma and energy is trading in green, while Auto, Realty and PSU Banks is in red. Consumer Price Index (CPI) Inflation rose to 4.91% during the month of November 2021. The uptick on sequential basis was led by an increase in food prices, particularly vegetables. The overall Consumer Food Price Index (CFPI) rose to 1.87% from 0.85% in the preceding month. Notably, the RBI had projected CPI inflation at 5.3% for FY22, hence it is within the targeted range.

Markets are anticipating that Federal Reserve policy makers will announce a faster pace of tapering on Wednesday in response to rising inflation, and will do enough rate hikes to take their main policy rate target to 2.5% by the end of 2024. This week brings a flurry of other central-bank decisions, including Bank of England, the European Central Bank and the Bank of Japan. In addition, markets will be focused on coronavirus headlines. The government's focus is clearly on supporting growth through sufficient liquidity and low interest rates despite street fears over rising inflation, changes in interest rate policy by global economies and high commodity prices. However, India is at the beginning of capex revival phase and therefore corporate earnings recovery looks sustainable and premium valuations might sustain, barring near term hiccups.

Source : Equity Bulls

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