New Delhi, Aug. 19 -- Financials, healthcare and materials are emerging as key sector leaders as the macroeconomic cycle moves into a recovery phase, although investor sentiment in equities continues to remain cautious, according to a report by SBI Funds Management's August 2026 sector outlook.

The report said while the "Macro Cycle Regime moved to the recovery stage", the "Equity Sentiment Regimes is still showing anxiety". Against this backdrop, SBI MF said it is currently positive on healthcare, financials and materials. The report said the three sectors are supported by a combination of improving fundamentals and sector-specific factors.

It noted that "Financials offer the strongest combination of supportive macro conditions, reason...