Nonetheless, returns in CY21 are expected to be similar to that in CY20 levels of around 12% and more uniform across sectors compared with the wide divergence seen this year.
Indian equities may be valued at their most expensive ever but foreign portfolio investors continue to be buyers. Flows in December have crossed $6 billion and could well hit $7 billion before the month is over.
While it’s the abundance of liquidity worldwide that is channelling funds into equities, India seems to be getting more than its fair share of EM allocations.
The earlier-than-expected rebound in the economy is expected to give corporate earnings a fillip as also boost the government’s tax collections allowing it to spend more on much-needed investments. While earnings for FY22 have been upgraded post the results announcements for Q2FY21,the Street is betting on more upgrades.
Nonetheless, returns in CY21 are expected to be similar to that in CY20 levels of around 12% and more uniform across sectors compared with the wide divergence seen this year.
Analysts believe several sectors and stocks are now looking fairly valued and offer limited scope for re-rating.
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