Post Market views - Feb 24, 2021 - Mr. Binod Modi, Head Strategy at Reliance Securities
(Time Zone: Arizona, USA)
While domestic equities witnessed a brisk opening today, trading halt at NSE due to technical glitches made investors especially day traders anxious. There is ambiguity as of now especially pertaining to status of pending orders and intra-day square-off positioning. However, Sensex recorded modest gain today and reclaimed 50,000 levels despite mixed cues from global markets. A broad-based kind of rally was seen today with S&P Bank and Financials indices recording over 1% gains. In our view, Fed Chairman Powell's dovish statement in his latest testimony offered comfort of global equities.
Rising bond yields globally and higher commodity prices created some amount of volatility in last couple of days. Further, FIIs turning net seller in recent days can be a reason to worry in the near term. However, we continue to believe that FIIs flow should be favourable in the medium to long term perspective as underlying strength of Indian equities remains intact. Further, continued dovish stance indicated by the Fed Chairman in his latest testimony offered much-needed support to global equities. In our view, a situation like taper tantrum in 2013 still looks far away. Union Budget has already succeeded in offering clarity about sustainability of ongoing rebound in corporate earnings by way of substantial increase in capital expenditures and a slew of measures to stimulate investment and consumption activities in the country. In our view sectors, which are prone to be benefitted most from revival in economic recovery, may outperform broader indices here-on. Any meaningful correction in the market can be used as buying opportunity.