Muhurat trading: Dalal Street welcomes Samvat 2078 with fireworks

Markets ended Samvat 2077 with a decade best performance as equities delivered the best-in-class returns during the past one year. The special, one-hour Muhurat Trading session on Thursday ended with gains of 0.5 per cent at the headline level while the broader MidCap and SmallCap indices on the BSE ended with gains of 0.7 per cent and 1.4 per cent.
 
In absolute terms, the Sensex index closed at 60,068 levels, up 296 points, while the Nifty50 index shut shop at 17,917-mark, up 8 points. Market breadth favoured buyers on the Street as nearly 2,600 stocks advanced on the BSE and against 522 stocks that declined.
 
Since the last Muhurat Trading, the BSE barometer has zoomed 37.5 per cent while the Nifty50 has soared 40 per cent. Gains on the mid-and small-cap stocks also caught investors' fancy, with the two indices on the BSE moving up 63 per cent and 82 per cent, respectively.
 
The rally for the frontline indices this Samvat was the best in 12 years and exceeded returns from other asset classes like gold and fixed deposit, and also the savings bank rate.
 
As regards primary markets, a total of 49 companies raised Rs 81,615 crore in Samvat 2077, more than the preceding four years and almost double the amount raised in the previous year.
 
The returns given by newly-listed companies have also lured a lot of first-time investors into IPOs. The BSE IPO Index, a gauge tracking newly-listed companies, rose 91 per cent in Samvat 2077.
 
Going forward, analysts say gains in the secondary market may be relatively muted, given the rich valuations and the imminent taper of the US Federal Reserve’s bond-buying programme, even as outlook for the primary market looks even more promising.
 
Macro headwinds, such as high global crude oil prices, supply-chain disruptions, inflationary pressures, the possibility of hardening interest rates across the globe, internal economic challenges in China and its global ramifications, and escalating tensions between the US and China, are likely to keep global and local markets volatile.
 
That said, small- and mid-caps are picking up steam and balance-sheet leveraging is likely to play out in 2022. Besides, investors can watch out sectors like housing, banking, infrastructure, IT, travel and tourism on the back of improved demand outlook, increased govt spending on capex, and digital transformation.
 
Coming to the bond markets. Experts expect Samvat 2078 to be even more interesting for the rupee and bond yields.
 
The 10-year bond yield was at 5.88 per cent at the beginning of Samvat 2077 - a result of the Reserve Bank of India’s (RBI's) extraordinary liquidity measures and active intervention to keep yields below 6 per cent to make it easy for the government and the corporate entities to borrow. The 10-year yields closed at 6.34 per cent on Wednesday - a rise of 48 basis points.
 
The rupee, meanwhile, ended on a better note. The rupee was at 74.61 to a dollar on November 13 - the beginning of Samvat. It ended at 74.46 to a dollar on Wednesday.
 
During the upcoming Samvat, the appreciation of the rupee could be limited up to 73.8 to 74 levels and the overall bias will remain on the weaker side, with potential depreciation veering towards 76.5 to 77.
 
And before we close, a look at the global markets. European stocks moved higher on Thursday as markets reacted to the US Federal Reserve’s announcement that it will start to taper its bond-buying program and the Bank of England's decision to hold rates steady for now.
 
The pan-European STOXX 60 index was up 0.4 per cent while the UK's FTSE 100 added 0.3 per cent.
 
In the US, Dow Jones was down 0.1 per cent while the S&P500 and the Nasdaq Composite were up 0.15 per cent and 0.3 per cent, respectively.