Samvat 2077 the best for equity markets in 12 years. What to expect next?
As Samvat 2077 draws to a close, we take a look at how the markets fared this Samvat, which sectors sparkled on bourses, and what may be the road ahead for markets in Samvat 2078?
Puneet WadhwaNikita Vashisht New Delhi
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Photo: Kamlesh Pednekar
The rally for the frontline indices this Samvat was the best in 12 years.
Back in Samvat 2065, the Sensex and Nifty had risen 104 per cent each; the mid-cap index had gained 123 per cent and small-cap had surged 120 per cent.
Gains in equity markets in Samvat 2077 far exceeded returns from other asset classes like gold and fixed deposit, and also the savings bank rate. Among sectors, realty gained the most at 122 per cent in Samvat 2077.
The other prominent gainers included the Nifty Metal index and Nifty PSU Bank index. On the other hand, pharma (19%), FMCG (24%) and private banks (31%) were underperformers, as defensives took a breather.
This liquidity-driven rally saw foreign portfolio investors (FPIs) pump in around Rs 1.36 trillion ($189 billion) in Indian equities on a net basis during Samvat 2077.
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Domestic institutional investors (DIIs), including domestic mutual funds, insurance companies, banks, financial institutions, pension funds, etc, on the other hand, withdrew nearly Rs 36,682 crore after five consecutive years of inflows.
Going into Samvat 2078, experts suggest that investors brace for volatility. The market direction, they say, will be guided by a host of domestic and foreign factors that will keep the markets choppy.
These include commodity prices and their impact on Inflation and corporate earnings; policy stance of global central banks, especially the US Fed; fresh wave of Covid infections, if any; global developments like economic recovery and China factors; and IPO pipeline, besides liquidity with retail investors.
U R Bhat, co-founder & director, Alphaniti Fintech, said:
- The economy is on a revival path
- There has been a sustained recovery from the gloom & doom seen last year
- Corporate results have been good
- Formalisation is taking place in the Indian economy
- Markets are discounting a lot of these positives
- Optically low base, which is an incorrect comparison
- FPI selling is a concern
- Retail investors hold the key
Against this backdrop, investors should brace for a volatile phase in the Indian equity market in the short to medium term.
Moreover, FPI trends amid a likely deferral of the T+1 settlement cycle will also sway market trajectory in the near term.
According to a Business Standard report, the Securities and Exchange Board of India is likely to defer and tweak the diktat on implementing the T+1 settlement cycle.
Following representations from foreign investors, the settlement cycle may now be implemented in a phased manner starting February 25, and apply only to the bottom 100 companies.
That said, the markets will remain closed today on account of Diwali. However, the exchanges will hold a special Muhurat Trading session in the evening to usher in Samvat 2078.
This year, the Muhurat trading session will begin at 6:15 pm and end at 7:15 pm and with the closing session is slated between 7:25 and 7:35 PM. Markets will also be closed on Friday on account of Diwali Balipratipada.
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First Published: Nov 04 2021 | 8:00 AM IST