Cyclicals To Drive Q3 Earnings, Another Upgrade In FY21/FY22 Nifty EPS, Says Motilal Oswal
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Motilal Oswal Report
As we enter CY21, the backdrop to the market and corporate earnings has evolved considerably in the last three months.
After a good 9%/15% run-up in Nifty/NSE Midcap 100 in Q2 FY21, these indices have rallied 24%/23% in Q3 FY21, led by corporate earnings, supportive liquidity conditions, low interest rates, and a sharp spike in foreign institutional investor inflows in November and December 2020.
Opening up of the economy, 80% reduction in active Covid-19 cases since September 2020, and strong high frequency macro data have lifted sentiment.
Recent approvals for the Covid-19 vaccines have provided a booster shot to the Indian market, which has since then been on steroids, with a much broader participation from mid-caps and small-caps.
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