 "Samvat 2078")
The stock markets kicked off Samvat 2078 on a positive note on Thursday, with the benchmark indices gaining during the ceremonial one-hour-long trading session, continuing the momentum from the previous year, when the markets broke many records.
The Sensex ended the session at 60,068, a gain of 296 points, or 0.5 per cent. The Nifty50 ended with a gain of 0.5 per cent, or 88 points, at 17,917. A majority of the components on both indices ended with gains.
Among Sensex stocks, Mahindra & Mahindra was the best performer, gaining over 3 per cent, while HDFC Bank and Reliance Industries made the biggest contributions to index gains.
Several retail participants consider buying shares on muhurat day auspicious, and indulge in ceremonial purchases. Institutional investors and brokers trade to price in global cues or key developments.
Global cues were positive on Thursday even though the US Federal Reserve said it will scale back its massive $120 billion monthly bond-buying programme. The US Federal Reserve Chairman Jay Powell’s assurance that the central bank would be patient with interest rate hikes boosted investor sentiment.
This was the fourth straight year the market has notched up gains on Muhurat day.
“Typically, the muhurat trading session ends on a positive note. Most of the investors think this is the best day to buy. They make token purchases, so there are more buyers than sellers,” said Ambareesh Baliga, an independent markets analyst.
The mood among those present at the BSE was cheerful following a year of superlative returns. The benchmark Sensex finished Samvat 2077 with a 38 per cent gain—the most in 12 years. The mid-cap and small-cap indices jumped 63 per cent and 83 per cent during the year.
Most investors felt returns this year will be positive, but relatively muted. Analysts believe investors will have to brace for more volatility over the next 3-6 months as the US Fed and other central banks get ready to lift interest rates as inflation concerns rise.
“After a great year for equity markets, investors are looking forward to markets continuing rising though not at the same pace. Global headwinds in the form of rising inflation and withdrawal of monetary stimulus may impact the moment. However, strength in Indian macros and improving micros may help offset these. Investors need to conduct portfolio, asset allocation reviews, and raise the quality of stocks held in their portfolio,” said Dhiraj Relli, managing director and chief executive officer, HDFC Securities.
The rise in crude oil prices, supply chain disruptions due to Covid-19, the economic uncertainty in China, and geopolitical tensions between US and China are weighing on investors’ minds.
Last month, two foreign brokerages downgraded the Indian markets citing expensive valuations. Foreign portfolio investors (FPIs) were net sellers to the tune of Rs 13,350 crore in October. So far this month, they have sold shares worth Rs 4,583 crore.
Last Samvat’s gains were underpinned by aggressive stimulus measures undertaken by central banks. Another factor that spurred the markets was the enthusiastic participation of retail investors, which has driven returns over the past 4-5 months even as other emerging markets faltered.
A lack of adequate returns in other asset classes and lockdown induced restlessness, which gave them ample time to research and make informed decisions, led to their increased participation, say experts.
However, first-time investors might have to battle volatility going ahead.
“This Samvat is likely to be very volatile, unlike the one that has just concluded. Rate hikes by the US Fed will lead to some capital flight from emerging markets like India, and this is likely to trigger some sharp correction in the market,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
