Post Market views - Feb 15, 2021 - Mr. Binod Modi, Head Strategy at Reliance Securities

Domestic equities remained upbeat and benchmark indices Nifty and Sensex recorded fresh all-time highs. Strong cues from global markets and robust 3QFY21 corporate earnings supported markets. Financials have been sole driving force today, while other key sectoral indices like IT, Pharma and Metals witnessed some amount of pullback. Volatility index too softened further by ~2%. Axis Bank, ICICI Bank, SBI Bank and Bajaj Finance were top gainers, while SBI Life, HDFC Life, TCS and Grasim were laggards.

In our view, India appears to be in a sweet spot as of now led by a number of tailwinds, which should continue to offer sustained corporate earnings rebound. A sharp improvement in 3QFY21 corporate earnings and visibility of sustaining the momentum led by higher capital expenditures allocated in the Union Budget with bold measures to revive investment and consumption activities augur well for market in the long run. However, higher Brent prices and hardening of Bond Yields across global markets could be a near term concerns. Similarly, as markets are at all-time highs and are discounting a large portion of earnings recovery, a broad-based rally might not happen here-on and bottom-up investing approach should be preferred. In our view, beneficiary of high capex like Infrastructure, industrials, engineering, building materials, select Auto and Banks are likely to outperform markets in the medium term.

Source : Equity Bulls

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