Daily Market Commentary - Jan 27, 2022 - Bonanza Portfolio

Mr Vishal Wagh, Research Head - Bonanza Portfolio

The market continues to be volatile amid various global events and monthly F&O expiry. Nifty opened the gap down and headed towards its previous day's low levels where it found meaningful support. A comeback was seen with the PSU Bank index rallying over 5% in afternoon trade today well supported by auto stocks to stage a smart recovery. As IT & pharma stocks witnessed profit-taking, textile stocks were sought after in the broader market on the back of earnings. BSE midcap and small-cap indices fell 0.71 percent.

Both Nifty and Sensex ended the January 2022 expiry at 17,110 and 57,276 respectively.

On the daily charts, the index seems to be forming a base that indicates consolidation as traders do not want to increase their positions on account of budget in the upcoming week. Going ahead, the index has to close above 17,500 to continue its upward trajectory and on the downside, now 17,000 & 16,800 should act as good support.

On the Global front, given that the US inflation rate reached 7% in December, which is way above the Fed's target of 2%, the logical inclination is to expect a hike of at least 50 bps, but the Fed may also want to keep it gradual. In the December meeting, Fed has signaled a forecast of three policy rate hikes, but the rising inflation has convinced market participants that there would most likely be four rate hikes. The emerging markets will feel the pressure as liquidity gets eroded. FII's have been net sellers in the Indian market and the US Fed's increasingly hawkish stance is expected to continue putting selling pressure in Indian markets.

HCL Technologies, Tech Mahindra, Dr. Reddy's Laboratories, TCS, and Wipro were the top Nifty losers, while gainers included Axis Bank, SBI, Maruti Suzuki, Cipla, and Kotak Mahindra Bank.

Source : Equity Bulls

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DailyMarketCommentary BonanzaPortfolio Nifty Sensex