Samvat 2078 was a tough ride for Indian and global stock markets.
While the first half was plagued by FII outflows, weaker currencies and supply chain disruptions, the second half saw a steep recovery due to falling commodity prices, particularly crude oil.
Amid all this, Indian equities proved resilient, supported by healthy retail and HNI participation, which helped offset large outflows from foreign portfolio investors.
Overall, the S&P BSE Sensex and Nifty50 fell a meager 1%, while the BSE MidCap index fell about 4%.
The BSE SmallCap was the only outlier with a gain of 0.1%.
Analysts expect Samvat 2079 to bring more volatility in the near future, due to the deterioration of global macros and uncertainties in western economies.
Speak with Business Standard, Devang Mehta, Head Equity Advisory, Centrum Wealth says Samvat 2079 will inherit the global headwinds of Samvat 2078. Inflation, interest rates in the main US market controllable. Recession/delay in US, Europe to be tracked. Escalation or resolution of the key of war in Ukraine for raw materials.
Of the domestic triggers, India’s response to crude oil price volatility will be closely watched by market participants.
Gaurang Shah, chief investment strategist, Geojit Financial Services, says OPEC+ will cut oil supply by two million bpd from November. Heavy winter, possible economic recovery in the West to boost demand. Volatile natural gas, crude oil prices remain the main overhangs.
That said, India’s outperformance against global competitors, as seen in the outgoing Samvat, is likely to continue this Samvat if the economy maintains 3Cs.
Devang Mehta, Head Equity Advisory, Centrum Wealth, says Indian shares in Samvat 2078 outperformed global competitors. This is likely to continue as economic fundamentals and corporate profitability improve. 3Cs will play an important role. Consumption, capital expenditure and credit growth will lead to a strong rally in India.
In addition, the markets’ reactions to foreign capital flows vis-à-vis retail investors, the trading activity of HNI and Family Offices will also affect indices this year.
Today, the Indian stock exchanges will hold the special one-hour Muhurat Trading on the occasion of Diwali. Normal trading takes place between 6:15 PM and 7:15 PM. Trade change, post close, is allowed until 7:25 PM.