Muhurat trading for Vikram Samvat 2076 took place on Sunday 27th October and markets gained. BSESENSEX was up 192 points while NIFTY gained 44 points. Samvat 2075, the year gone by saw the benchmark indices register gains. BSESENSEX gained 3,820.39 points or 10.84% to close at 39,058.06 points. NIFTY gained 985.5 points or 9.29% to close at 11,583.90 points. The midcap and Smallcap indices registered losses. The year had begun on Wednesday the 7th of November 2018. It was a tough year for the markets and they struggled for some time before some momentum came in post Balakot strike in February 2019 and then the resounding mandate to the NDA in May 2019. Post the new all-time high in May, markets then saw corrections on global cues, slowdown in the Indian economy, China-US trade war and so on.
If one is to look at the performance of Muhurat trading and try to infer what the year ahead has in store there is not much one can infer. The new year saw BSESENSEX gain 192 points and NIFTY gain 44 points. Last year BSESENSEX gained 246 points and NIFTY gained 68 points on Muhurat day. What is even more interesting is the intra-day movement which certainly is comparable. The indices open with a gap and almost near the day’s high from where they cool off. This year the BSESENSEX open was 39,397, high 39,402, low 39,180 and close 39,250. Last year it was open 35,301, high 35302, low 35,183 and close 35,237. Similarly, on NIFTY this year it was open 11,662, high 11,672, low 11,604 and close 11,627. Last year it was open 10,614, high 10,616, low 10,582 and close 10,598. The only thing that stands out is that markets open around the top and lose some ground but continue to remain positive.
Coming to the previous week which began with a trading holiday on Monday 2st October for state elections in Maharashtra and Haryana, markets lost ground. BSESENSEX lost 240.32 points or 0.61% to close at 39,058.06 points while NIFTY lost 77.95 points or 0.67% to close at 11,583.90 points. The broader indices saw BSE100, BSE200 and BSE500 lose 0.75%, 0.61% and 0.56% respectively. BSEMIDCAP lost 0.54% while BSESMALLCAP gained 0.20%. Markets gained on two of the trading days and lost on the remaining two days.
Dow Jones gained 110.11 points or 0.41% to close at 26,958.06 points. The Indian Rupee gained 26 paisa or 0.41% to close at Rs 70.88 to the US Dollar.
Markets have been lacklustre for sometime and one always uses important events to reflect on the past and look into the future. Diwali is a good time to do so. The beginning of Vikram Samvat on Sunday the 27th of October is expected to see benchmark indices perform better than the previous Samvat year. The slowdown notwithstanding, the economy is expected to rebound in a couple of quarters on the back of tax cuts already announced and some more measures which may or may not be announced. The oil and gas sector and the BFSI space could see sharp recovery. The former on the expected divestment of BPCL which would lead to a rerating of the sector and the latter because it has been beaten down with a number of companies involved in unhealthy practices. Some names for example include DHFL, ILFS, YES Bank and the India Bulls group of companies.
Insurance is India is highly under penetrated and all the listed companies in the space have seen huge interest in recent times. Many companies have raised funds through stake sale via offer for sale and they have got lapped up on the bourses. Ayushman Bharat has shown the impact of affordable insurance for the people and the healthcare sector. This is also a key indicator for the expected growth in the insurance sector particularly life where even protection is abysmally at low levels.
PSU stocks have shown interest by investors and many of the companies have seen their stock prices move up buoyed by the performance of IRCTC on listing on 14th October. Shares of IRCTC which were issued at Rs 320 closed at Rs 899.40 a gain of Rs 579.40 or 181%. The proposed divestment of BPCL by way of a strategic sale is expected to rerate the industry. It would also largely meet the divestment target for the year. One hears talk on the streets that the deal could happen any time soon and one should not be surprised if the announcement happens in November itself.
Thursday the 31st of October sees October futures expire. The current value of NIFTY at 11,583.90 points is marginally higher than the series open by a mere 12.70 points or 0.11%. With three trading days to go the series could go in either direction but I believe that the bulls have an edge with the new Samvat backing them.
The mood on the street is changing from pessimistic to neutral with a positive bias. This itself is a huge shift. With ground reality likely to improve in the coming months and two quarters, things should be even better.
The strategy in the coming two quarters remaining in Financial year 2019-20, would be to build on one’s portfolio using any dips that come one’s way.
Wishing all a happy Diwali and prosperous Samvat 2076.
