Daily market commentary by Mr. Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Private Ltd.

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Equity markets showed some cautiousness before the Q2 GDP data release. Profit booking after the recent rally and weakness in global markets impacted sentiments. BSE Sensex fell 336 points (0.82%) to 40,794 while the Nifty 50 was down 95 points (0.78%) to 12,056. The broader markets however outperformed with the NSE Midcap as well as Small cap Indices closing in the green. A concern of US-China trade deal have a negative impact on metal stocks. Auto stocks witnessed profit booking ahead of November monthly data announcement.

Today also marked the monthly closing for the market. Nifty managed to gain for the third consecutive month, up 2.3% in November, after making stellar gains of 3.5% in October and 4.1% in September. Nifty also managed to touch a new life high during the month touching 12,158. Nifty Bank was up almost 7% largely driven by PSU banking index which rose more than 14% for the month.  Nifty Realty (+5.5%), Nifty Pharma (+4.7%) and Nifty Metals (+4.3%) were some of the other major gainers during the month, while Nifty Auto (-4.3%), Nifty FMCG (-3.1%) and Nifty IT (-1.2%) were major losers.

Next week, Auto stocks would be reacting to their November sales data. Also, some of the mid and smaller banks would be in focus as the IPO of Ujjivan Small Finance Bank would open to raising Rs750 crore. While overall Market Sentiments continue to remain positive, there is some cautiousness as well as profit booking seen at higher levels. Further, weakness in the underlying economy as well slower earnings growth leave limited room for upside. However, we believe that the current momentum can sustain in the near term on the back of strong liquidity flows and positive sentiments.

Technically, Nifty formed a Red body candle on a daily chart. While the index concluded the week with a gain of 1.19% and formed a green body candle on a weekly chart. A positive momentum after the formation of three consecutive Doji candles on a weekly chart is a positive sign for the market. Thus, till the time, Nifty holds above 12000 zones, we maintain our positive stance on the market for an up move towards 12250 levels.