The traditional muhurat trading session for Vikram Samvat 2076 carried out on the auspicious Diwali Evening on Sunday October 27 turned out to be a normal one and in line with its past performance. Both the benchmark indices, the Sensex of the Bombay Stock Exchange (BSE) and the Nifty-50 of the National Stock Exchange (NSE) ended with marginal gains.
The Sensex gained 192.14 points (0.49 per cent) to close at 39,250.20, while Nifty was up 43.25 points (0.37 per cent) to close the session at 11,627.15. With the exception of BSE Telecom and BSE Consumer Durables indices, all the mainstream and sectoral indices ended the session in green.
This is the ninth time that the benchmark index has closed in green on the muhurat trading day in since 2007. Only in 2007, 2012, 2016 and 2017, the index has ended in red marginally.
The immediate day following muhurat trading session being observed as a trading holiday on account of Diwali Balpratipada every year, when markets resume trading, the day after, except on three occasions (2008, 2011 and 2017) in last 12 years, the index has closed in red. Nifty has entered a consolidation phase after facing resistance at 11,720, says Jimeet Modi, Founder and CEO, SAMCO Securities and StockNote.
“Market will gain momentum the moment Nifty crosses 11750, which will then take the market to 12,000 swiftly. Buy on dips should be the strategy for the traders,” he says.
Amisha Vora, Joint MD, Prabhudas Lilladher Group, says, “Two issues are very crucial to be watched in the short term. First important point is, how the overall consumption picks up, that is to be seen. As the monsoon was normal and above average, the consumption should pick up but will take time and will gain momentum gradually. However, the overall economic recovery will be slow and gradual”.
The second most important factor that market will have to take into account is to identify quality and non-quality stocks, she said. As new Samvat year 2076 has arrrived, the market optimism is building up on the second round of relief package that may be announced from the centre in the form of slashing down of personal income tax rate. Motilal Oswal, MD and CEO, Motilal Oswal Financial Services says, “We are optimistic about the medium to long term perspective. We see tremendous interest amongst the foreign investors.” Brand India is at it all time high. Government is also proactively addressing many basic issues. After the big bang corporate tax rate cut, we are hopeful that personal income tax rate will also be cut and we may come across many more reforms announcements as the new Samavat 2076 progresses,” Vora says.
“The quality stocks will continue to perform despite weakness prevailing in the market. If one has to make out whether the macro-economic indicators have begun to improve and its impact is felt or not, that can be seen from the rising interest and price-level of the mid-cap stocks. People with deep pockets and holding capacity have already begun accumulating fundamentally strong mid-cap stocks”, she added.
Vora advises investors to remain invested. From the asset allocation point of view, she says, “If you have currently allocated 25 per cent of your investible resources to mid-cap, slowly and gradually increase it to 35-40 per cent as the overall market sentiment and the mid cap segment’ performance improves.” Geo-political situation will continue to dominate the market scene.
The elimination of ISIS chief Baghdadi and its resultant positive impact in reducing global level tensions will help sentiments, analysts said. Vinod Nair, Head of Research, Geojit Financial Services says, “The US Fed is expected to keep its interest rates steady when they meet based on the macro numbers. Volatility is expected to prevail for short term with the overall market volumes showing a decreasing trend as further cues on Brexit and trade war will remain in focus. On a long-term perspective, attractive schemes for consumers, boost from festive season and accommodative factors like fall in oil prices are expected to provide positive momentum for the Indian equity market.”