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Markets in Samvat 2078: The biggest themes and drivers for New Year

After a stellar liquidity-driven run in Samvat 2077, how should we expect the markets to behave in Samvat 2078? What will be the broader driving themes, and what will be the risks? Let's take a look

Topics
Muhurat trading | Samvat 2078 | Samvat 2077

Nikita Vashisht & Puneet Wadhwa  |  New Delhi 

Infosys, L&T are top picks of most brokerages for Samvat 2078
Photo: Kamlesh Pednekar

Equity started on an upbeat note against the backdrop of a sharp cut in excise duty on fuel prices and a scale-down in bond-buying programme by the US Federal Reserve. The BSE Sensex ended the special one-hour session 296 points, or 0.49 per cent, higher at 60,068. The broader Nifty50, on the other hand, settled at 17,917, up 88 points or 0.49 per cent. In the past one year, market bulls saw many historic levels being achieved on the bourses, with the economic revival picking up pace amid benign liquidity, Covid-19 cases being contained, a significant pick-up in the pace of vaccination, and a sharp recovery in corporate earnings. Celebrating the bull-run that started in March 2020, saw the Nifty surpassing the 18,000-mark and the Sensex clinching 62,000 for the first time. BSE’s market capitalisation touched Rs 271 trillion, as FPIs pumped in Rs 1.36 trillion If technical chartists are to be believed, there may be more upside for the Sensex and Nifty in Samvat 2078, provided these two indices are able to take out their resistance levels with conviction and on good volumes. While the current trend indicates a sideways movement for the Sensex, an up move above 61,500 may trigger a rally towards a new uncharted territory, suggest charts. Likewise, as long as the Nifty sustains above the support of 17,500 on a closing basis and does not show a decisive decline, the overall bullish trend may continue. On the fundamental side, let’s now go to Devang Mehta, head of equity advisory at Centrum Wealth, to understand the state of the economy and how the are likely to fare in Devang Mehta, head of equity advisory, Centrum Wealth, said:

  • resilient in the face of Covid-19
  • Economic indicators remain strong
  • Real Estate sales, consumer behaviour, vaccination on an upswing
That said, the last week of saw bulls and bears locking horns as FPIs pulled out money due to extremely expensive valuations.

During the first 3 trading sessions of November, FPIs have already sold equities worth over Rs 4,500 crore. They were also net sellers of securities worth Rs 12,437 crore in October. So, will this cautious stance affect trading in the new Samvat? According to Mehta…

  • ‘Animal spirits’ being unleashed by India Inc
  • India will see all-round growth
  • Large, mid-sized companies will see earnings expansion
  • Shift from outperforming to underperforming markets
  • Appetite for ownership of Indian equities rising
And what about the risks to the equity rally? To what extent are they priced in? Here’s what Mehta said:
  • Crude topping $100 a barrel
  • Large IPOs sucking out liquidity
  • Interest rates rising too much, too soon
  • Markets aware of these risks
Overall, there are more gains for equities in the offing in Samvat 2078, even if the up move is slow as gradual. As higher crude oil prices, sticky inflation, and potential interest rate hikes will keep the markets volatile, sticking to stocks of fundamentally strong companies and having a diversified portfolio will help investors sail through the year.

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First Published: Fri, November 05 2021. 08:00 IST
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