Indian stock markets will open for a special Diwali muhurat trading on Sunday, November 12, 2023, between 6 pm and 7.15 pm, to mark the beginning of Hindi accounting year Vikram Samvat 2080. The muhurat trading is a common ritual followed by traders in India as it is considered as the auspicious time to begin something new or make good investments.
As per the Hindu mythology, Muhurat commemorates the start of a new ‘Vikram Samvat, which is followed by business communities such as Marwari and Gujarati to open their account books. Most Hindu investors take blessings of Goddess Laxmi by worshiping their books of account on eve of Diwali and start new account books for the next business cycle.
Historical data of the last ten years shows that the BSE benchmark Sensex ended the muhurat day trading sessions on a positive note, except 2017. The year 2017 (Samvat 2074) was the worst Diwali muhurat session in the last decade, with the Sensex losing 0.6% during the session.
On the other hand, the last muhurat session (Samvat 2079) was the best for traders as the Sensex gained 0.88% on that day.
In the last 1 year (till November 8), the BSE Sensex and the broader NSE Nifty rallied 6.5% and 7.1%, respectively, despite volatility in the first half. Outperforming the benchmark indices, the Small and Midcap indices emerged as the winners during this period, registering a strong growth of 31% and 26%, respectively.
The first half of Samvat 2079 was subdued for the Indian stock market due to a slew of factors such as rising interest rates and bond yields, resurgence of Covid-19 cases in China towards the end of 2022, Union Budget, and other macroeconomic challenges.
However, the Indian market staged a remarkable recovery in the second half, rebounding from its Mar’23 bottom. The factors contributed to this rally included positive sentiment during the G-20 event, sustained fund inflows by foreign institutional investors (FIIs), improved corporate earnings, strong macro indicators and positive expectations for the private investment cycle.
The market capitalisation (m-cap) of BSE-listed firms surged to record high of ₹320 crore in the first week of June, taking India to the 5th largest market in the world, after the U.S., China, Japan, and Hong Kong.
According to Axis Securities, investors, both domestic and foreign, have demonstrated a proactive and unwavering belief in India's long-term growth narrative. “This faith has been bolstered even more during the last seven months of FY24, with FIIs injecting an impressive $15 billion into the Indian equity market. Additionally, the monthly Systematic Investment Plan (SIP) inflow in mutual funds has surged to over ₹16,000 crore in Sep’23. This substantial increase serves as a compelling indicator of investors' steadfast confidence in India's growth trajectory,” the brokerage says in a report.
Going ahead, the brokerage house expects Samvat 2080 to be an interesting year to watch out for the global economy. “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.”
The market is entering a critical period marked by state assembly elections in some key states this month, followed by general elections scheduled next year. “This political landscape is expected to introduce increased volatility over the next 12 months compared to the current levels,” Axis Securities says in its report.
Meanwhile, Swastika Investmart believes there is considerable potential for robust gains in the upcoming year. “Firstly, the forthcoming Assembly elections in May 2024 hold significant importance for the market, with a victory for the ruling party expected to provide a significant boost. Currently, Indian equities are outperforming most global markets. Secondly, the peaking of interest rates in both the U.S. and India is a positive sign for market growth,” says Sunil Nyati, Managing Director of Swastika Investmart.
In terms of levels, on a conservative note, Nifty has the potential to reach 24,000 if the ruling party secures a majority in the upcoming elections, but a different electoral outcome could briefly disrupt the ongoing bull market rally, says Nyati.
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