Diwali 2023: What should be your investment strategy in Samvat 2080? Here’s what experts recommend
Samvat 2080 will be a very interesting year to watch out for, for the global economy, believe experts. They expect a robust growth in both the Nifty 50 and the Sensex. With a positive outlook ahead, what strategy should you follow in the next year? Here's what experts recommend.
Samvat 2079 proved to be an intriguing year for the Indian equity market, characterised by notable volatility in the first half. Several factors contributed to this turbulence, including a hawkish central bank view on the interest rates, rising bond yields, the Russia-Ukraine War, surging crude oil prices, and sticky inflation. These occurrences collectively subdued market performance in the first half of the year.
However, in the second half, the Indian market witnessed a remarkable recovery from its March 2023 bottom. During this time, the broader market outperformed large-cap companies by notable margins.
Samvat 2080 will be a very interesting year to watch out for, for the global economy, believe experts. They expect a robust growth in both the Nifty 50 and the Sensex, despite the anticipation of a somewhat turbulent market ascent. Experts find the outlook for the Indian market extremely promising.
"We embark on this new Samvat with a narrative marked by ‘Higher for Longer’ interest rates, volatile bond yields, geopolitical conflicts in the Middle East, and fluctuating oil prices. However, on the domestic front, the prospects for the Indian economy appear notably brighter and more promising. In the midst of a volatile global landscape, India remains in a favourable position for growth. it's essential to note that we are entering a period marked by a few major state elections this month, with a general election scheduled for next year. This political landscape is expected to introduce increased volatility over the next 12 months compared to the current levels," stated brokerage house Axis Securities.
With a positive outlook ahead, what strategy should you follow in the next year? Here's what experts recommend.
Motilal Oswal
Despite global uncertainties, India remains a shining star and is expected to maintain its outperformance. Nifty is trading at a 12-month forward P/E of 17.6x, which is at a 13 percent discount to its 10-year average, thus providing comfort. We believe that over the next couple of quarters, sector rotation could be an important driver along with the overall market uptrend. We also believe valuations will become an important factor in stock selection to drive outperformance in portfolios.
Reliance Securities
The 3Es - Economy, Elections, Earnings, and geopolitical crisis outcomes over the next few quarters would drive the return for the next Samvat year, 2080. We believe every decline in the market is likely to present a good opportunity as strong earnings rollover to FY26E will make the markets more attractive compared to the long-term averages, setting the goal post for NIFTY50 to scale to 22000+ over the next one year (19.5 times one year forward). Healthy momentum in corporate earnings, strong retail participation, all-time high SIP flows, and relative underperformance of largecaps in the last few months pave the way for superior returns in largecaps v/s midcaps. NIFTY50 earnings are estimated to clock a decent 9 percent CAGR over FY24-FY26E based on consensus Bloomberg estimates and NIFTY50 is trading at 17.2 times one year forward well below the long-term 10-year averages which provides comfort at current valuations and limited downside despite the key events.
Read here: Equity vs Gold: What should you invest in this Diwali?
Deepak Jasani, Head of Retail Research at HDFC Securities
We continue to favour domestic-oriented businesses and favour opportunities in the sectors like Materials, Pharma, Oil & Gas, Small Finance banks, Petrochemicals, Consumption, Power EPC and restructuring plays for the next year.
Manoj Dalmia of Proficient Group of Companies
We hold a positive outlook for Samvat 2080 (the Hindu calendar year), and we recommend viewing any market dips as opportunities to acquire fundamentally robust stocks. It's advisable to consider having a significant portion of your portfolio in large-cap stocks since they generally have more reasonable valuations compared to mid and small-cap stocks. PNB Housing, Canara Bank, Union Bank, Maruti Suzuki and Shriram Finance can be considered for a long-term holding after thorough market research.
SP Toshniwal (SP), Founder and CEO of ProStocks
Mutual funds are getting a consistent flow of funds through SIP, which will increase further with the addition of new investors. Q2 FY2324 results so far from large companies are encouraging. Interest rates more or less have peaked and there may be a pause before it starts reducing by next year. One can expect a 10 to 15 percent return at index level.
Read here: Diwali 2023: Market loves to celebrate; Nifty fell in only 3 of last 15 Muhurat trading sessions
Kunal Ambasta, Co-Founder and Chief Investment Officer at Liquide
Banking, infra, and pharma can be the flavor of the year ahead backed by India’s addition to the JPMorgan bond index, upcoming election, and other sectorial reforms. With the Lok Sabha Elections approaching in about six months, the market might witness a pre-election rally. Historical trends have shown an upward trajectory post Diwali, typically peaking around election time.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.
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