The new Samvat 2074
is likely to take the market through a path of uncharted territory as the curtain calls to an eventful Samvat 2073.
From Narendra Modi-led demonetisation
drive to the implementation of goods and services tax (GST) bill, the markets
went through jitters, yet the Nifty 50 notched up gains of around 17 per cent.
At the global level, the surprise victory of Donald Trump
in the US
presidential election, geopolitical tensions between US
and North Korea and monetary policies of global central banks took markets
for a ride. However, during Samvat 2073, the S&P BSE Sensex, like Nifty, also gained around 16 per cent. Interest rates for fixed income investors have also softened through the year.
Business Standard brings you the full coverage on Samvat 2073
Market stays resilient despite disruptions
The market rally during this period has mostly been supported by domestic flows in the absence of a heavy investment
by foreign institutional investors (FIIs), who withdrew over $4 billion (nearly Rs 26,000 crore) in just two months since August. During the same period, mutual funds (MFs) bought shares worth close to Rs 50,000 crore. (More details here
Gold may not be your best bet
prices are ruling a bit higher in India as compared to international prices. The roll out of GST
and Prevention of Money Laundering Act has put the gold
market in a spot. Moreover, expectations that the US
Federal Reserve may raise interest rates for a third time by December this year has prompted traders to take a cautious stance on bullion. Gold
is highly sensitive to the US
interest rates and inflation and increases the opportunity cost of holding non-yielding bullion which is priced in US
Hareesh V, research head at Geofin Comtrade told Business Standard
that it is better for investors not to take any fresh long positions, but continue to invest in gold
in the typical formats by monthly or periodic incremental investments.
Deepak Jasani, retail research at HDFC securities, says equities
could come off initially due to a host of reasons. These include the delay in the revival of corporate earnings, which may not happen for another one-two quarters. Liquidity withdrawal and its strong signs by US, Japan and lately UK and eurozone could create jitters among the equity investors who have entered into an arbitrage trade. (More details
Jasani said debt markets
could remain lacklustre as ample liquidity and slow growth in credit demand will keep a lid on interest rates, while forex situation (including current account deficit and FII flows) could provide a floor to the interest rates. Gold
prices seem to be on the up globally and hence could see some follow through in India (subject to USDINR rates).
Hero MotoCorp – Target price Rs 4300
Indiabulls Housing Finance – Target price Rs 1,600
ITC – Target price Rs 336
L&T – Target price - Rs 1,400
Can Fin Homes – Target price – Rs 3,200
CDSL – Target Price Rs 450
Glenmark Pharma – Target price Rs 900
Natco Pharma – Target price - Rs 1,200
Somany Ceramics – Target price Rs 1,020
Analysts caution pace of local flows will depend on how economy shapes up
Analysts caution that markets
are likely to remain volatile in Samvat 2074
as strategies adopted by the global central banks; corporate earnings growth of India Inc; commodity prices, especially crude oil; and the progress on reforms and health of the economy are some of the key factors that will have a bearing on the overall market sentiment. That apart, market participants will also keep a tab on the state polls
over the next one year, especially Gujarat.
“As expected last year, interest rates have come down and with weak inflationary forces, I do not see any reason why interest rates should go up. The monsoons have been satisfactory for last two years and oil price has remained stable at the low level since January-2015. RBI's foreign exchange reserves have crossed $400 billion mark and the rupee has been strengthening, for the most part, since December-2016. Even on the reforms front, too, the government has implemented GST
which will be a long-term positive for our economy,” says Dinnesh Thakkar, chairman and managing director at Angel Broking. (Click here to read more on analysts take
Themes that will dominate next Samvat
Auto, Metals could continue to do well, Realty could be a dark horse while Healthcare could make a comeback in the coming Samwat. Insurance stocks
could remain in demand as investors grapple with the right way to value them (and the multiple thereof) in an economy like India.
Advice on Muhurat trading
While it is considered auspicious to trade on Muhurat day, it can only be of token quantity due to the shallow market and wide bid-ask spread in trading for short period on the Muhurat day. One can buy any of the shortlisted stocks
in a small quantity to adhere to the traditions.