Samvat 2079 began on a buoyant note for the stock markets, with the benchmark BSE Sensex and NSE Nifty 50 indices gaining close to 1 percent during the special Muhurat trading session on Monday.
The 30-share BSE Sensex closed 525 points or 0.9 percent higher at 59,831.66 points and the broader NSE Nifty 50 rose 154 points or 0.9 percent to 17,730.75 level.
Select banks and financial services companies led the gainers through the session as investors were supported by continued strong credit growth. Private sector lender ICICI Bank was up 2.1 percent, SBI was up 1.7 percent and HDFC, HDFC Bank was up around 1.6 percent. Bajaj Finserv and Axis Bank also gained around 1 percent.
Elsewhere, Larsen & Toubro (1.8 percent), Dr. Reddy’s Labs (1.3 percent), Infosys (1.2 percent), NTPC (1.1 percent), Mahindra & Mahindra (1.1 percent) and Tata Steel (1.0 percent) ) were the other major large-cap gainers.
Samvat 2078 was quite a volatile year for stock market investors. After the stellar run between April 2020-October 2021, stock markets saw sharp swings through 2022 amid rising geopolitical tensions, and tighter monetary policies as central banks in major economies raised interest rates to tackle high inflation.
The BSE Sensex has declined 0.8 percent since last Diwali, marking the first year of negative returns since Samvat 2071 (calendar year 2015). However, Indian markets fared much better than many other markets. For example, the MSCI World Index and the MSCI Emerging Market Index fell 23 percent and 33 percent respectively.
“From the market perspective, two factors stand out. One, India’s economic fundamentals are relatively strong. Two, DIIs and retail investors have become a force to reckon with, overwhelming the selling by FIIs (foreign institutional investors),” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Even as the new Samvat opened on a strong note, rising interest rates and the unknown trajectory of the Russian invasion of Ukraine will be challenges that investors will have to navigate and therefore should be cautious this year, Vijayakumar said.
As noted by Nilesh Shah, group chairman and director of Kotak Mahindra Asset Management Co., there will be a celebration along with a “loud burst of crackers.”
“Ukraine, US Fed rate, oil, inflation and China’s zero Covid policy will continue to boom. A disciplined investor who can buy on the dips will make money. A momentum investor will have a hard time managing volatility,” he said.
Analysts at Reliance Securities expect the Nifty 50 to deliver around 14 percent returns over Samvat 2079.
“Going into Samvat 2079, we expect markets to remain under pressure and witness more volatility in the near term due to deteriorating global macros and uncertainties prevailing in western economies. However, we believe that India would see a multi-year economic up cycle amid stronger macros, minimal impact of Covid, China plus one strategy and various government initiatives under schemes such as PLI (production-linked incentives)…”, the analysts. said
Commodity prices softening, a healthy rabi crop led by a normal monsoon, inflation peaking and a likely stable currency would support corporate earnings in the second half of FY23, they added.
Banks, capital goods and manufacturing companies are likely to outperform the market this year, believes Kotak AMC’s Shah.