Markets

'In the short term, we may see some disruptions due to Covid, but in the medium-to-long term, we should keep an eye on US inflation and 10-year bond yields.'

Agriculture activity, according to recent channel checks by Prabhudas Lilladher, is expected to continue at a strong pace in FY22.

Over the next three - six months, UBS believes earnings will be the main driver for EM equities outperformance.

'Rising Covid cases and localised lockdowns are being closely monitored.'

However, a prolonged and intense second wave that curtails oxygen supply to industries for a longer-than-expected period will exacerbate downside risk in affected sectors

If the current restrictions remain in place until the end of May, we estimate that the cumulative loss of activity could amount to around $10.5 billion, or around 0.34 percentage point (pp) of annual nominal gross domestic product, say Barclays economists.

'They can shift to dynamic asset allocation funds to automatically rebalance their equity exposure.'

However, despite Covid, Indian markets registered their best financial year performance in a decade, with the Sensex and Nifty50 rallying 68 per cent and 71 per cent, respectively, in FY21.

The divestment process, however, will not be an easy affair as there are multiple stakeholders, including the employee unions, whose concerns will have to be addressed.

The markets have been unable to sustain at higher levels as a rise in bond yields globally, especially in the US have dented sentiment. Surging commodity prices, especially crude oil that have now hit $70 a barrel (Brent) coupled with inflation woes and fear of sporadic lockdown across major economic hubs back home as Covid cases rise have chased the bulls away. In the short-term, analysts expect the markets to remain volatile as they react to news flow - both from overseas and developments back home. Investors, they say, need to keep a tab on how the US treasury yields move, which in turn will have a ripple effect on how big money moves across developed (DMs) and emerging markets (EMs), including India.

Despite a massive underperformance at the bourses since the last six months, analysts are turning optimistic on Reliance Industries (RIL). Those at Jefferies, for instance, say that the company is a proxy play for India's consumption growth story. The key catalysts for the stock, according to a Jeffries note, include faster-than-expected market share gain in retail, oil-to-chemicals (O2C) stake sale, recovery in gross refining margins (GRM), potential public listing of Jio and even a possible banking licence going ahead. That apart, analysts feel any tariff hike in Reliance Jio (RJio) - its telecom venture - will also aid performance. With balance sheet adequately de-levered, proceeds from a strategic stake sale in the O2C business will create a sizeable war chest for the company, analysts say.

The current up move, according to analysts, closely resembles the rally post the global financial crisis in 2008-09, not just in quantum and speed, but also the way small-and mid-cap indices outperformed large-cap peers.

IMD expects day temperatures to remain above-normal in select regions across the country between March and May 2021.

sharper-than-expected economic recovery back home, analysts say, can fuel a further rally in domestic cyclicals, industrials, and financials as global central banks continue with their easy money policy.

Christopher Wood, global head of equity strategy at Jefferies reiterate his bullish view on Indian equities on the back of a steady fall in Covid cases coupled with a sharp economic recovery in India, reports Puneet Wadhwa.

Auto companies are now grappling with a slowdown in sales, triggered by pent up demand due to the COVID-led lockdown easing a bit and supply-side issues for raw material.

Analysts, however, suggest investors remain selective on realty stocks and buy only where there is revenue visibility and a credible promoter backing.

PSU divestment, LIC IPO, fiscal deficit: Budget 2021 marks a clear change in the Modi government's stance from fiscal conservatism to growth orientation.

Very gradual fiscal consolidation glide path with looser-than-expected fiscal policy; good quality spending mix and reasonable assumption on fiscal math; and focus on privatisation, asset monetisation and long-term funding for infrastructure investments, according to Morgan Stanley, are the three key themes from the Budget 2021.