New Delhi, Nov 7 : The significant feature of equity market performance in Samvat 2076 has been the sharp divergences both across and within sectors and companies highlighting the differentiated impact of Covid-19 on various sectors, according to Motilal Oswal Financial Services The report said equity markets had a historical journey in Samvat 2076, as it marked a year of huge volatility, unpredictability, pessimism, divergence and optimism. The markets touched an all time high of 12,431 in January, and then hit a three-year low of 7,511 in March as Covid-19 pandemic gripped the whole world, becoming one of the biggest threats to the worldwide economy. The unlocking of the economy since June has led to a significant recovery in various macro, micro and high frequency data points, resulting in equity markets nearing its lifetime high once again. Nifty is up 4.6 per cent since last Diwali while Midcaps outperformed Nifty and is up 9.3 per cent. Nifty Smallcap is up 4 per cent. The significant feature of equity market performance in Samvat 2076 has been the sharp divergences both across and within sectors and companies -- highlighting the differentiated impact of Covid on various sectors. Clearly, the essentials (Healthcare, Staples) and Technology/Online/E-Commerce businesses were impacted far less than the Financials, Cyclicals and Discretionaries. In fact, for Healthcare and Technology sectors, the pandemic acted as a tailwind, which can be gauged from their sharp outperformance in Samvat 2076 -- Pharma/IT up 51 per cent/44 per cent. On the contrary, Financials, especially PSU Banks, bore the maximum brunt of Covid, the report said. "As we enter Samvat 2077, the markets have seen a complete recovery from the Covid lows, in-line with the improving data points and positive corporate commentary. More importantly, Covid-19 cases have seen a meaningful decline. Improved corporate earnings have also buoyed the market sentiments. We expect Nifty EPS growth of four per cent in FY21 while expecting a sharp rebound in FY22", the report said. "Thus, the overall structure of the market remains positive. At 18x FY22 earnings, Nifty valuations is also not very expensive as it is trading closer to its long-period averages. With the economic activity recovering fast, more earning upgrades cannot be ruled out. Further strong global markets can keep the liquidity abundant in the system, thus providing support to the overall market. However, intermittent corrections cannot be ruled out as there is a risk of a second wave of Covid-19 and thus sustenance of economic recovery holds the key", the report said. "From the next 12 months perspective, we are positive on IT, Healthcare, Rural-Agri, Telecom, Consumer along with select Financials. We believe another round of fiscal stimulus could help elevate sentiment further", it added. Among the picks, the brokerage expects a 42 per cent upside in Bharti Airtel, 37 per cent in SBI, 26 per cent in Hero Motocorp, 23 per cent in Infosys, 21 per cent in Ultratech Cement, 20 per cent in ICICI Bank, 17 per cent in Crompton Consumer, 15 per cent in Dabur, 13 per cent in PI Industries and 10 per cent in Divi's Lab. /IANS