Indian equities rally for the third month in a row driven by FPI flows – Indian equities closed in the green for the third month in arrow with the benchmark Nifty up by 2.8% for the month driven by FII flows. FII flows for the month stood at `47,080 crore which is the highest during the calendar year. Markets were also supported by better than expected Q1FY2021 numbers along with continued improvement in underlying economic conditions.

We expect recovery theme to gather strength while sectors with revenue visibility will continue doing well – We expect the rural, essential and digital theme to continue playing out over the next few quarters given revenue visibility and strong growth prospects. We therefore continue to maintain our positive outlook on sectors like Agrochemicals, IT, Telecom, Two wheelers and tractors. However we also expect the recovery theme to gather strength in the near future due to continued improvement in the economy. Within the recovery theme we believe that sectors like low ticket consumer durables, cement, hotels and multiplexes should do well.

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