Equity markets opened gap down due to dampened global cues. Although it tried to make some recovery, it again fell in the second half of the day. Both NIFTY/Sensex shed 171/587 points (-1.1% each) to close at 15,752/52,553. The broader market were mixed with Nifty Midcap 100 down 0.8% while Nifty Smallcap 100 remained flat to marginally positive (+0.03%). Except Realty (+0.4%) and Pharma (+0.2%) all other sectors ended in red. Nifty Private Bank Index (-2.0%) was the worst performer dragged by index heavyweight HDFC Bank which fell -3.3% after posting weak results. Nifty Bank (-1.9%), Metals (-1.4%), Auto (-1.1%) were some of the other major losers. Media, IT, FMCG lost between 0.2%-0.5%. India VIX inched higher by 8.4% to end at 12.68 levels.

Globally, markets remained weak as investors turned pessimist over rising Delta variant of Covid-19 cases, fear of possible lockdown and impact of rising inflation on economic recovery.

Back home, following global trend, domestic equities too witnessed selling pressure and ended lower by more than 1%. Selling was witnessed in Banking and Financial services stocks after HDFC Bank's net profit missed expectations as bad loan provisions rose and asset quality deteriorated.

Realty stocks were in focus today on the back of news that major developers in the country have increased residential prices by 8-10% due to rise in input prices, such as cement, steel and so on.

Primary market was in thick of action as 2 new stocks listed at significant premium after getting blockbuster subscription. Clean Science shares listed with a premium of 98% at Rs 1,784 compared to its issue price of Rs 900 while GR Infra shares debuted at Rs1,700, a 103% premium over its IPO price of Rs 837.

Commenting on the market outlook, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services opined, "Technically Nifty formed a Doji candle on daily scale with long shadows on either side and negated its higher highs - higher lows formation of the last five sessions. Now, it has to cross and hold above 15,750 zones to witness an up move towards 16,000 levels while on the downside support exists at 15,700 / 15,600 levels.

The Q1 result season has been a mixed bag so far and has led to sector /stocks specific action which is likely to continue. Also it may provide investors with some insights into the scale of economic recovery through the management commentaries. Market has been consolidating near its life highs for last couple of weeks. While the declines are being bought into, follow up is missing at higher levels suggesting some fatigue creeping in.

Overall, equity markets have shown strong resilience even though it faces headwinds from the advent of a possible third COVID wave and persistent inflation readings prompting a potential rate increase. Restrictions this time around was localized and less stringent v/s the lockdown in CY20 leading to positive macro data points both on global and domestic front which is giving confidence to the investors of economic rebound. Hence it would be a tough fight between the Bulls and Bears in the coming days and one needs to remain watchful of possible movement in either direction."