Post Market views - Jan 11, 2021 - Mr. Binod Modi, Head Strategy at Reliance Securities
(Time Zone: Arizona, USA)
Domestic equities remained in the grip of bulls with benchmark indices registering fresh highs as robust earnings performance by TCS and D-mart bolstered investors' confidence. Auto and IT stocks witnessed strong rebound, while Banks and Metals witnessed profit booking. Volatility index witnessed sharp increase indicating some amount of uneasiness about the markets. Tata Motors, HCL Tech, Infosys and Wipro were among top gainers, while Tata Steel, L&T and Bajaj Finance were laggards.
Continued improvement in Covid-19 recovery rates and announcement of vaccination process from 16th Jan'21 offer comfort to markets. Further, expectations of sharp recovery in corporate earnings led by sustained rebound in key economic data may propel market to witness fresh highs in the near term. In our view, FPIs flow may continue to remain favourable given status of global economy, stance of global central bankers and weak dollar. Domestic equities can also witness pre-Budget rally in coming weeks considering a broad expectations of pro-growth union budget. However, recent surge in 10-year USA Treasury Bills and sharp rise in Brent prices can pose a near term threat to the market. However, as markets are already trading at all-time highs with rich valuations and a number of stocks are already trading ahead of their fundamentals, investors must play cautiously and invest on quality companies with strong track records and solid fundamentals.