1 min read.Updated: 29 Nov 2021, 03:39 PM ISTLivemint
The brokerage expects sector rotation in the market to continue and defensives like pharma, IT, and consumer to make a comeback till sentiments improve
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The Indian market has taken a breather after touching highs in October 2021 led by several factors. Nifty has corrected 8% after surging to record levels last month. Despite the pullback, India remains among the top performers in CY21, with the Nifty up 21% in CY21 (year-to-date) as compared to a flattish performance of the MSCI EM Index.
In this pullback, brokerage house Motilal Oswal has highlighted its preferred stock ideas to buy in the midcaps space which are SAIL, APL Apollo Tubes, Emami, Ramco Cement, Zensar Tech, Solara Active Pharma, Orient Electric, Angel One, Transport Corp, NOCIL.
The brokerage expects sector rotation in the market to continue and defensives like Pharma, IT, and Consumer to make a comeback till sentiments improve.
“Corporate earnings delivery continues to remain robust (link) as 2QFY22 earnings were above our estimates, led by strong growth in Metals, Oil and Gas, and PSU Banks," the note highlighted.
Metals, Private Banks, FMCG, Realty, and Auto have seen a major correction among indices, while IT and Pharma have remained relative outperformers.
“The decline in active cases has led to an increase in economic activity and mobility. While the new variant – Omicron – adds to the uncertainty, we expect more clarity to emerge in the next few weeks as additional data comes out," Motilal added in its note.
Travel, Tourism, Hospitality, and Retail, has seen significant outperformance in the last few months on the back of opening up of economy, a good festive season, and a broad-based demand recovery. Even sectors/stocks exposed to markets with rising COVID-19 cases/greater prevalence of the Omicron variant may underperform, the brokerage further added.