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Below is Outlook on Samvat 2078 by Mr. Motilal Oswal – MD & CEO, Motilal Oswal Financial Services Ltd

Equity markets had a historical journey in Samvat 2077, as it touched new life time highs with Nifty/Sensex surpassing 18k/60k mark for the first time in history. The run up in the market has been driven by a strong global liquidity, containment of COVID-19 cases, significant pickup in vaccination and sharp recovery in corporate earnings.

Nifty has given more than 40% returns in Samvat 2077 so far, while Midcaps/Smallcaps have outperformed with returns in excess of 70%/80% respectively. The key themes during Samvat 2077 were high beta, cyclicals and value stocks.

With the economic cycle picking up, we expect the corporate earnings growth to revive as well. Markets have always moved in tandem with earnings growth. Although there would be ups and downs in-between, we expect the overall trend of the market to remain positive in Samvat 2078 as well.

Some of the themes which we expect to play out during Samvat 2078 are certain segments were we can see earnings normalization with improving economy, increasing spending to benefit companies in Technology, Travel, Tourism, leisure & QSR segment. Real Estate and ancillaries like cement and other building material companies are also expected to witness increasing demand. Finally, stock selection was the key in generating returns within the Midcap space during Samvat 2077 – a trend which we believe could continue going ahead as well.

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