Post Market views - Dec 28, 2021 - Mr Mitul Shah, Head Of Research at Reliance Securities

Domestic equities closed higher, taking global cues as US market ended at record high level. Nifty up close to 1%, while all the sectors are in green. The broader market outperformed the main indices, Nifty MidCap is up 1.2% while SmallCap index is up 1.6%. Consumer durable and Auto index are key gainers amongst all with clear outperformance by recording around 1.5% up move. As US markets witnessed Santa Claus rally with 1-1.5% gain across indices, it helped investor sentiment across globe today. The data showed that consumer sentiment improved, new home sales increased, durable goods orders beat forecasts and jobless claims signaled further labor market healing. But inflation-adjusted consumer spending stagnated, flagging risks from rapidly rising prices.

The government's focus is clearly on supporting growth through sufficient liquidity and low interest rates despite street fears over rising inflation, changes in interest rate policy by global economies and high commodity prices. However, India is at the beginning of capex revival phase and therefore corporate earnings recovery looks sustainable and premium valuations might sustain. We believe that India is better placed compared to major global economies in terms of handling Covid and its spread, while revival of capex and higher growth potential over next 1-2 years would keep Indian economy expansion ahead of many other nations. This would lead to bounce back in Indices going into 2022.

Source : Equity Bulls

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