Samvat 2077: Here are the sectors that are expected to do well

 

The significant feature of equity market performance in Samvat 2076 has been the sharp divergences both across and within sectors and companies.

The stock market had a roller-coaster ride during Samvat 2076, as it rose till January 2020, then witnessed a sharp fall and later made an equally smart recovery. On Monday, the equity market hit a fresh record high on firm global cues after Democrat candidate Joe Biden emerged winner in the 2020 US Presidential elections.

The significant feature of equity market performance in Samvat 2076 has been the sharp divergences both across and within sectors and companies - highlighting the differentiated impact of Covid on various sectors.

As the markets are on the cusp of entering Samvat 2077, both the indices hit their respective all-time high, in-line with the improving data points and positive corporate commentary. More importantly, Covid-19 cases have seen a meaningful decline. That apart, better-than-expected results and comforting commentary / guidance from India Inc have allayed investor concerns, analysts say.

"Improved corporate earnings have also buoyed the market sentiments. We expect Nifty EPS growth of 4 per cent in FY21 while expecting a sharp rebound in FY22," wrote analysts at Motilal Oswal Financial Services in a recent note.

While the rally till now has mostly been led by classic defensive plays like fast-moving consumer goods (FMCG), healthcare, and information technology (IT), analysts say there is still more steam left in stocks of these sectors. That apart, they suggest allocating investible funds to cyclical sectors and stocks, which they feel will go well as the economic activity picks up pace over the next few quarters.