Samvat 2079 begins on a strong note; Sensex, Nifty gain near 1 pc in Muhurat trading

Samvat 2079 started on a buoyant note for the stock markets, with the benchmark BSE Sensex and NSE Nifty 50 indexes gaining close to 1 per cent during the special Muhurat trading session on Monday.

The 30-share BSE Sensex closed 525 points or 0.9 per cent higher at 59,831.66 points and the wider NSE Nifty 50 rose 154 points or 0.9 per cent to 17,730.75 level.

Select banks and financial services companies led the gainers through the session, as investors were buoyed by continued strong credit growth. Private sector lender ICICI Bank surged 2.1 per cent, SBI was up 1.7 per cent and HDFC, HDFC Bank rose around 1.6 per cent. Bajaj Finserv and Axis Bank also gained around 1 per cent.

Elsewhere, Larsen & Toubro (1.8 per cent), Dr. Reddy’s Labs (1.3 per cent), Infosys (1.2 per cent), NTPC (1.1 per cent), Mahindra & Mahindra (1.1 per cent) and Tata Steel (1.0 per cent) were the other major large cap gainers.

Samvat 2078 had been a pretty volatile year for stock market investors. After the stellar run between April 2020-October 2021, stock markets saw sharp swings through 2022 amid growing geo-political tensions, and tighter monetary policies as central banks in major economies raised interest rates to tackle high inflation.

The BSE Sensex declined 0.8 per cent since last Diwali, marking the first year of negative returns since Samvat 2071 (calendar year 2015). Nonetheless, Indian markets fared much better than many other markets. For instance, the MSCI World Index and the MSCI Emerging Market Index tumbled 23 per cent and 33 per cent 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 FII (foreign institutional investors) selling,” said V.K. 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 investors will need to navigate and therefore should be cautious this year, said Vijayakumar.

As Nilesh Shah, group president and MD of Kotak Mahindra Asset Management Co. noted, there will be celebration along with “loud busting of crackers.”

“Ukraine, US Fed rate, oil, inflation and zero Covid policy of China will continue to bust. A disciplined investor who can buy on the dips will make money. A momentum investor will have tough time managing volatility,” he said.

Analysts at Reliance Securities expect the Nifty 50 to deliver around 14 per cent returns over Samvat 2079.

“Entering into Samvat 2079, we expect markets to remain under pressure and witness more volatility in the near-term on account of deterioration in 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 in terms of schemes like PLI (production-linked incentives)…,” the analysts said.

Commodity prices softening, healthy rabi crop led by normal monsoon, inflation peak out and 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, feels Shah of Kotak AMC.