Post Market Views - Dec 11, 2020 - Mr. Binod Modi, Head Strategy at Reliance Securities

Domestic equities remained resilient but erased gains towards the second half as concern over probable no-deal Brexit weighed on investors' sentiment. European markets saw a sharp gap down opening today on this concern. PSU Banks, Metals and FMCG continued to attract investors' interest, while profit bookings were visible in Pharma, IT and Automobile.

Any possible no-deal Brexit may be a near term headwind for the markets ahead of 31st December deadline. However, given persistent dovish tone of global central bankers, improved prospects of sound earnings growth and weak dollar index, we believe FPIs flow should remain benign in subsequent period for domestic markets. However, a sharp rise in Brent price and input prices can pose a near term threat for earnings recovery. Hence, in current scenario when market is richly valued, investors must stick to quality names with high margins of safety and sound earnings growth potential. We maintain our cautiously optimistic stance about equities.

Source : Equity Bulls

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