Post Market views - Dec 30, 2020 - Mr. Binod Modi, Head Strategy at Reliance Securities

Domestic markets gave up early gains and traded in a range bound. Volatility was quite visible ahead of F&O expiry. Baring Banks and Pharma, most key sectoral indices traded in green with marginal upside. Cement stocks were in focus today on expectations of better sales volume and improving volume prospects from real estate segments. UltraTech, UPL, Grasim and Shree Cement were among top gainers, while IndusInd Bank, Sun Pharma and Bharti Airtel were laggards.

Strong FPIs flow remains a dominant driving factor the market, which is expected to sustain in the near terms in the backdrop of soft monetary policy of global bankers, weak dollar and improved prospects of earnings recovery. Unlike 2QFY21 when pent up demand resulted in sharp earnings growth, 3QFY21 corporate earnings will be crucial for the market as this will offer clarity about the trend of regular demand and sustainability of earnings momentum. Considering rich valuations and earnings threat emerging from high input costs, investors should focus on quality names with strong earnings potential and margins of safety.

Source : Equity Bulls

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