Post Market views - Jan 25, 2021 - Mr. Binod Modi, Head Strategy at Reliance Securities
(Time Zone: Arizona, USA)
Domestic equities were quite volatile today and gave up all early hours' gains. Investors continued to prefer in taking profits off the table ahead of union budget and F&O expiry. Barring pharma and select financials, most of key sectoral indices were in pressure today. Notably, volatility index too surged over 3%, which was broadly expected. Grasim was in focus today as announcement of getting into paints business helped stock to register a sharp gain, while sharp profit booking in Reliance Industries despite posting better-than-estimated earnings dragged market.
3QFY21 corporate earnings so far have been quite impressive as earnings exceeded analysts' estimates in most of the companies. Further, vaccination drive started well in India, which along with continued improvement in recovery rate offers domestic equities an edge over other markets. Going forward, strong underlying strength, imminent huge fiscal stimulus in the USA with weak dollar should continue to attract FPIs in our markets. In our view, healthy earnings recovery will aid market to sustain premium valuations and therefore any meaningful pullback is likely to be bought out. However, volatility in the market may persist in coming trading days ahead of union budget and F&O expiry.