Binod Modi, Head - Strategy, Reliance Securities
Domestic equities remained in the grip of bulls with recording fresh highs fairly supported by firm global markets. Emerging prospects of additional fiscal stimulus in the USA and satisfactory progress on coronavirus vaccination bolstered investors’ sentiments.
Baring PSU banks, all key sectoral indices recorded gains. Metals continued to see outperformance, while Auto and Pharma also remained in flavour for today. HDFC, Hindalco, Bharti Airtel and Titan were top gainers, while ICICI Bank, GAIL and NTPC were laggards. Encouraging data for key economic indicators and positive news flows continued to attract investors’ interest in domestic equities.
Further, improving prospects of corporate earnings recovery, weak dollar index, consistent improvement in coronavirus recovery rates, government’s strong commitment to revive the economy and dismal real interest rate scenario globally continued to act as key tailwinds to attract FPIs flows into Indian equities. However, broad based rally might not be sustainable in subsequent period given rich valuations of market. Hence, investors should stick to quality names with strong earnings potential and sound corporate governance. (Share Manthan, December 16, 2020)
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