Below are Views On Indian equity market started the first day of 2021 on the positive note By Mr. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd

“Indian equity market started the first day of 2021 on the positive note with Nifty closing above 14K for 1st time. On closing basis, Nifty was up 37 points (+0.26%) at 14,018, while Sensex gained 118 points (+0.25%) at 47,869. With this, the Sensex posted its ninth straight week of gains for the Sensex, its longest streak since April 2010. Action was witnessed in the broader market with significantly outperformed with Nifty Midcap 100/Nifty Smallcap 100 up +1.2% each. Except Nifty Bank (-0.3%), all other sectoral indices ended in the green led by the PSU Bank (+3.2%) and Auto (+0.9%). IT, Realty, Pharma, FMCG, Media gained between 0.65-0.8%.

Global cues were positive as investors look forward to an economic recovery in 2021 after one of the most tumultuous years in memory for equities. A combination of more federal aid and continuing vaccinations has helped the S&P 500 to finish the year with a gain of about 16%. While some markets are closed for New year holiday, overall positive sentiments continue on the back of the fresh stimulus announced, Brexit deal and hopes that the ongoing vaccine rollout would bring better days in the coming year. On the domestic side, Strong FIIs inflow continue to support the positive sentiments. Nifty gained marginally on range-bound trend while stock specific action was witnessed throughout the day. Power, NBFC, Pharma and PSU Banking stocks were in focus. Select Auto stocks like Maruti and Escorts gained after announcing better than expected December sales data.

Technically, Nifty is forming higher lows from last seven trading sessions. Now it has to continue to hold above 13850 zones to witness a rally towards 14200- 14500 zones while on the downside major support exists at 13700- 13750 levels. India VIX fell by 7.3% from 21.09 to 19.56 levels. Cool off in volatility below 20 zones supports the overall bullish market setup and fuels the bulls with a higher market base.

Going ahead, the market momentum seen in the last couple of months is likely to continue on the back of strong global cues, sustained inflows, and improving macros trends. The December quarterly results and Union Budget around 1st Feb will be some of the key event for the market. The Dec quarterly numbers are expected to be much better due to strong festival as well as post festive demand. As the long term market structure remains positive, we would advise investors to adopt Buying on Dips strategy to accumulate quality stocks.”

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