Street hopes to leave rocky year behind

Analysts said the Indian economy is in a better position than others, with earnings growth expected to remain strong. He said a pick-up in the rural economy hit by food inflation and erratic rainfall would augur well for the economy and income.

To be sure, market volatility is not likely to go away anytime soon, with continued geopolitical volatility around the world, interest rate tightening, a stronger dollar and higher crude oil prices. Experts warned that the new Samvat year, the calendar followed in parts of the Indian subcontinent, is likely to remain a stock pickers market.

Nilesh Shah, Group President and Managing Director, Kotak Mahindra Asset Management Company said, “Samvat 2079 is likely to be like Diwali. The celebration will be celebrated with loud firecrackers. Ukraine, US Fed rate, oil, inflation and zero-covid policy of China will cloud the markets. A disciplined investor who can buy dips will make money. A momentum investor will have a harder time managing volatility.”

Overall, there appears to be some optimism, although concerns about foreign portfolio investment outflows continue. FPIs who were net sellers in Indian equities since November last year became net buyers for July and August and again net sellers in September and October. The rupee has depreciated nearly 10% in Samvat year 2078 on the strengthening of the dollar against most currencies amid high US interest rates. The yield on the benchmark 10-year government bond is 7.5%, and is up 18% in Samvat 2078.

Analysts at Prabhudas Lilladher said, “Samvat 2078 will go down in history as one of the most volatile years, with the tech stocks and IPO boom post-Russia-Ukraine war, multi-decade high global inflation and the sharpest recent interest.” The rates had gone up. Bar.”

Analysts said Nifty has been volatile in the last 12 months in a broad 3,000-point range from 15,183 to 18,350 and traded mostly in the 16,500-17,000 zones. However, Nifty ended at 17,576.30, down 1.9% on Samvat 2078. The Sensex is also down 1.3% at 59,307.15.

On the positive side, Nifty has outperformed the global market as Dow Jones Industrial Index is down 15% as compared to Nifty’s 1.5% gain.

Analysts too remain positive as the market has regained lost ground, with Nifty up 20% and Sensex up 18% from June lows.

Other major indices such as Bank Nifty, Mid Cap and Small Cap indices have also gained 30%, 27% and 34% respectively. Analysts at Axis Securities said they expect Nifty to trade positively in Samvat 2079. The underlying tone of the market remains bullish, he added.

On fundamentals too, analysts at Prabhudas Lilladher said, “India looks like a pearl in the sea, with food security, an economy driven by domestic demand, production-linked stimulus in manufacturing and defence, low bad loans of the decade”. It also has the advantage of a strong banking system. Strong infra capex and continued investment in startups. Even as high inflation has hit demand in the lower and lower middle classes, festive demand waning due to the impact of Covid, good monsoon, pick-up in infrastructure and real estate growth (boosting employment) And analysts said, strong hiring demand across sectors. While the uncertain global environment and the expected slowdown in the US and Europe remain a concern, they believe India will successfully navigate the period and emerge stronger, he said. .

Analysts at Prabhudas Lilladher prefer companies with a presence in emerging segments, strong balance sheets and business momentum.

Banks, capital goods, manufacturing are expected to outperform the market in Samvat 2079. Kotak’s Shah said Tech and Pharma will provide interesting opportunities on a bottom-up basis.

In terms of technical indicators, Rahul Sharma, Director, Technical & Derivative Research, JM Financial Services Ltd., said, “Nifty is at a turning point at 17,600, above which we can expect an aggressive price action with a target of 18,000. Huh. 18,100 for the coming week. Nifty Futures has seen a long rise of around 12% in the last two trading sessions while Bank Nifty has seen a long rise of around 10%. Generally, whenever we see growth like this, the markets move decisively.”