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It turned out to be a good week for the domestic equity investors with the benchmark equity index BSE Sensex settled above 49,200-mark, while the 50-share Nifty index regained 14,800 levels. Market sentiment got a boost last week after the Reserve Bank of India (RBI) unveiled liquidity measures.

The 30-share Sensex surged 424 points, or 0.87%, to 49,206 during the week. On the other hand, the BSE Midcap index gained 296 points, or 1.46%, to 20,608.61. The BSE Smallcap index climbed 547.99 points, or 2.53%, to 22,218.10. Likewise, the 50-share Nifty index gained 192 points, or 1.31%, to 14,823.15.

The ongoing earnings trajectory for the midcap and smallcap stocks continues to be very encouraging with many smallcap firms seeing a 100% growth in earnings led by superior operating performance and low base effect.

According to Axis Securities, the low base will continue for another couple of quarters and hence, earnings growth will continue to look optically high. Nonetheless, there are real tailwinds of improving realisations, jump in export orders (wherever applicable) and improving demand scenario. The mid and smallcap theme is very much here to stay in FY22.

Stocks to buy

Meanwhile, Axis Securities recommends over 10 stocks that can deliver a robust return to investors in the long run. This list included ICICI Bank, State Bank of India (SBI), Equitas Small Finance Bank, Federal Bank, Bharti Airtel, HCL Technologies, Tech Mahindra, Varun Beverages, Relaxo Footwears, Amber Enterprises, Camlin Fine Science, Minda Corporation, Steel Strip Wheels, Lupin, and ACC.

The brokerage house has cut Nifty earnings by 6% and subsequently Nifty’s target also by 6% amid rising uncertainty over the second wave of Covid-19. Axis Securities Nifty at around 16,100 levels by the end of December 2021. “The market could correct but it will be an opportunity to accumulate stocks as per our top pick themes,” Axis Securities said.