Mr. Siddhartha Khemka, Motilal Oswal, has prepared the Daily Market Commentary for 19 May 2022

Motilal Oswal Financial Services Ltd. presents the Daily Market Commentary 19 May 2022 2022 by Mr. Siddhartha Khemka, Head – Retail Research

Due to weak global cues, Indian equity markets fell sharply.

During the RBI’s meeting, minutes also indicated hawkish attitudes for the forthcoming MPC meeting in June. The Nifty opened down and stayed under pressure throughout the session, ultimately losing 431 points (-2.7%) to 15,809 levels. The broad market also saw sharp declines, with the Nifty Midcap 100 down (-3%) while the Nifty Smallcap 100 down (-2.7%). IT & Metals ended in negative territory with a decline of 3-5% each. India Vix rose 10% to 24.56.

Following the UK’s inflation data, global markets fell 2-3% as investors remained concerned about widespread inflation. As Russian war in Ukraine fuelled further increases in food and fuel prices, UK inflation soared to 9%, the highest level in 40 years.

There has been a sharp decline in investor sentiment as inflationary pressures rise, FIIs continue to sell, and the rupee depreciates to all time lows. After a minor pause, sharp selling was seen again in the market and it was unable to hold at higher levels. Rising VIX is further giving discomfort and suggesting wild swings ahead. Nifty has broken its key support levels and weakening may continue until below 16,000.

The following is the daily market commentary for the 19 May 2022 2022 period by Mr. Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Limited.