Market Highlights: Sensex nosedives 1,145 pts as Bears take control, Nifty below 14,700; RIL, HDFC top index drags

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Positive sentiments formed after the announcement of Union Budget and robust 3QFY21 earnings appear to be fading now as investors indulge in profit booking and started focusing on reflation trade. However, we continue to believe that every correction in the market will be bought out as underlying strength of domestic equities is intact. Undoubtedly, budget succeeded to offer clarity about the sustainability of ongoing corporate earnings rebound in subsequent fiscals. Huge capital expenditure program and reforms announced in the budget to expedite infrastructure activities in the country are likely to support many ancillary industries and job creation. Further, persistent weak dollar and possibility of higher fiscal stimulus in the USA are likely to act as key tailwind for FPIs inflows. In our views, infrastructure, industrials, engineering, building materials, banks and select auto stocks are likely to outperform in the medium to long term perspective as these are the key beneficiary of higher capital expenditures. Investors will be keenly watching out December quarter GDP print, which would be released on Friday: Binod Modi, Head Strategy at Reliance Securities

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