Corporate earnings growth, Covid vaccine to drive markets in 2021: Analysts

Corporate earnings, especially in the July - September 2020 quarter (Q2FY21), got a boost from lower raw material cost and cost cutting measures adopted by companies in the backdrop of Covid-19

Markets are mostly pricing in most positives at the current levels, say analysts, who suggest the trajectory in the calendar year 2021 (CY21) will be guided by mostly by growth in corporate earnings. Those at Credit Suisse also caution against the expensive valuation at which the markets are trading at.

“Indian equities are no longer cheap: on price-to-equity (P/E) versus their own history, relative to global and EM equities, and versus domestic bond yields. We find the near-term cyclical recovery to be priced in. If the Nifty financial year 2021-22 (FY22) and FY23 index EPS forecasts sustain, in a year