Samvat 2074 failed to cheer the investors as the Indian stock gave lower returns than the previous two Samvat years, gaining between 4-8%. Traders and investors are now bracing themselves for the new Hindu calendar year ‘Samvat 2075’.
Samvat 2074 failed to cheer the investors as the Indian stock gave lower returns than the previous two Samvat years, gaining between 4-8%. Traders and investors are now bracing themselves for the new Hindu calendar year ‘Samvat 2075’. Market observers are of the opinion that the new year may continue to remain volatile with the impact of upcoming state and general elections, even as stable GDP growth of the country will provide the required impetus to the domestic share market.
“We expect equity markets to continue to be volatile as we enter Samvat 2075 amidst liquidity crunch for NBFCs, trade war, state elections, general elections, rupee depreciation will keep markets under pressure while stable GDP growth, hike in MSPs and rising consumption story will provide the required impetus for our market,” said Rahul Sharma, Senior Research Analyst, Equity99.
VK Sharma, Head PCG & Capital Markets Strategy, HDFC Securities, has given a positive outlook for Samvat 2075 with a target of 12,800 in the Nifty by next Diwali. “We give a positive outlook for Samvat 2075. We believe all the negatives are already priced in. Crude has climbed down from its high perch and the rupee is stabilising. We think the people are scared at this time and are reluctant to commit because of the impending elections. We have a target of 12,800 in the Nifty by next Diwali,” Sharma added.
The headline indices — Sensex and Nifty — ended Samvat 2074 on a positive note with technology shares grabbing the lion’s share of gains. On the contrary, the broader markets bled during the year, with the Nifty small-cap index plunging over 20% and the mid-cap index down over 7.8%. On the last day of Samvat 2074, the BSE Sensex ended 40.99 points higher at 34,991.91 points, while the NSE Nifty ended in the green at 10,530 points.
Nikhil Kamath, Co-Founder, Zerodha, has maintained a neutral outlook for the next 12 months with further room for correction in the benchmark indices which were still trading at valuations higher than the long-term mean post the recent correction. “The Indian bourses gave up all the gains achieved during the first half in the last two months. The indices seem to have reached an inflection point where the current events may largely play a major role in impacting the direction for the next year,” said Kamath.
“Moreover, the biggest dent has been the gross underperformance from the midcap and small-cap sectors which have corrected more than 20-30 percent in some cases. Even with the festivities around the corner, demand does not seem to be picking across sectors indicating a lackluster season this year,” he added.
Stock picks for Samvat 2075
On the auspicious occasion of Diwali, the BSE and NSE will conduct a special ‘Muhurat’ trading session today between 1700 hours and 1830 hours (5 pm-6.30 pm). The stock market will remain closed on Thursday, November 8 on account of Diwali Balipratipada.
Vinod Nair, Head Of Research, Geojit Financial Services, has picked the FMCG, or consumption oriented, and IT sectors to focus on this Samvat 2075. He has also bet on the pharma sector, with the assumption that the worst is over in terms of pricing issue in the US market can do better. Here is the list of top stocks to focus on this Samvat 2075:
- HDFC Bank: With the bank’s superior liquidity positioning (liquidity coverage ratio of ~118% as compared to 90% required), the bank would benefit from the credit squeeze to NBFCs and consolidation of PSU Banks, said Nair.
- Escorts: “We believe the long-term fundamentals of the tractor industry is solid,” said Nair.
- Asian Paints: “We expect volume to grow at double-digit ahead of festival season and reduction in GST rate,” he said.
- Cadila Healthcare: Considering strong financials, low valuations and aggressive expansion plans, Nair believes that Cadila Healthcare will continue its steadfast growth rate.
- HCL Technologies: On a one-year forward basis, the stock is currently trading at 13.5x which is a 27% discount to IT bellwethers (Infosys & TCS).