What five factors will drive markets in Samvat 2079?

Samvat 2078 was a rough ride for Indian and global stock markets.

While the first half was mired in FII outflows, weaker currency, and supply chain disruptions, the second half witnessed a steep recovery on the back of falling commodity prices, especially crude oil.

Amid all this, Indian equities proved to be resilient, bolstered by healthy retail and HNI participation, which helped offset the large outflows from foreign portfolio investors.

Overall the S&P BSE Sensex and the Nifty50 dipped a meagre 1%, while the BSE MidCap index fell about 4%.

The BSE SmallCap was the only outlier with 0.1% gain.

Going ahead, analysts expect Samvat 2079 to bring in greater volatility, at least in the near future, on account of deterioration in global macros and uncertainties prevailing in western economies.

Speaking to Business Standard, Devang Mehta, Head- Equity Advisory, Centrum Wealth says, Samvat 2079 to inherit global headwinds from Samvat 2078. Inflation, interest rates in the US key market monitorable. Recession/slowdown in the US, Europe to be tracked. Escalation or resolution of Ukraine war key determinant for commodities.

Among domestic triggers, India’s response to volatility in crude oil prices will be strongly eyed by market participants.

Gaurang Shah, Head Investment Strategist, Geojit Financial Services says, starting November, OPEC+ to cut oil supply by two million bpd. Severe winter, potential economic recovery in the West to push up demand. Volatile natural gas, crude oil prices remain key overhangs.

That said, India’s outperformance over global peers, as seen in the outgoing Samvat, will likely continue this Samvat as well if the economy maintains 3C’s.

Devang Mehta, Head- Equity Advisory, Centrum Wealth says, Indian equities outran global peers in Samvat 2078. This will likely sustain as economic fundamentals, corporate profitability improves. 3Cs will play important role. Consumption, capex, credit growth will lead to strong rally in India.

Besides, the markets’ reaction to foreign portfolio capital flows as against retail investors, HNI and Family Offices’ trading activity will also sway the indices this year.

Today, the Indian bourses will conduct the special, one-hour Muhurat Trading on the occasion of Diwali. Normal trading will be conducted between 6:15 pm and 7:15 pm. Trade modification, post close, will be allowed till 7:25 pm.