Daily Market Commentary - Dec 14, 2021 - Bonanza Portfolio

Mr Vishal Wagh, Research Head

Indices close in the red, Nifty above 17,300 mark as power, pharma gain & auto falls. BSE midcap is down 0.5 percent, while the small-cap index is trading flat. Among sectors, power index up 1 percent, while auto index down 1 percent.

Nifty started the day with a gap-down opening & tried to breach the 17,200 mark but active buying was seen which arrested the selling pressure in the first half of the trading session. The gap between 17,250-17,300 was successfully filled today and will be an important area for buyers. Now the index is expected to travel in the broad range of 17000-17650. The overall structure shows that the short-term consolidation is likely to continue further before the index prepares for a larger up move.

Domestic market was impacted by negative sentiments from other Asian markets as traders showed concern about WHO statement on the Omicron variant of Covid-19 coupled with the Federal Reserve policy meeting a week ahead. The Indian rupee has fallen to its lowest level since June 2020, which makes it an 18-month low against the US Dollar. The fall is largely driven by the fear of the rapid spread of the Omicron variant. The US Fed's meeting in the week ahead may announce an accelerated pace of liquidity tightening. A tapering by the US Fed will lead to an outflow of fund flows from emerging markets. The inflation in the US has risen to a multi-decade high, posing a risk for the Fed to act sooner than expected. The next few days will be dominated by the US Fed, ECB, and BoJ as they meet to decide on their respective monetary policy.

Power Grid Corporation, Nestle India, Axis Bank, and Dr. Reddy's Labs were the top gainers while ITC, Bajaj Finance, Kotak Mahindra Bank, and Bharti Airtel were the top losers.

Source : Equity Bulls

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