Post Market Views - Dec 18, 2020 - Mr. Binod Modi, Head Strategy at Reliance Securities

Domestic equities recovered from today's low in tandem with recovery in banking stocks. IT index was top performer today with strong buying in many IT counters due to strong performance and upbeat commentary from Accenture. However, barring IT and pharma, most key sectoral indices ended in red. Infosys, Dr Reddy, Bajaj Auto and Hindalco were among top gainers, while IndusInd Bank, ONGC and HDFC Banks were laggards.

A record FPIs flows remain as a key driving force for the market despite DIIs remaining net sellers. Strong prospects of earnings recovery, satisfactory progress on vaccination along with consistent improvement in recovery rate from Covid-19 cases, weak dollar and depressed interest rate scenario continue to act as key tailwinds for Indian equities to attract FPIs flows. Going forward, while markets continue to look buoyant on its underlying strengths, rich valuations and rise in input costs may act as key threats for broad based rally. Hence, companies which offer strong sustainable earnings visibility with improving financial matrix and sound corporate governance should be preferred.

Source : Equity Bulls

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