Samvat 2077 started on a positive note for the equity markets with the benchmark Sensex ending the ceremonial one-hour-long trading session with a gain of 195 points on Saturday. The Sensex ended the session at 43,638, a 0.45 per cent gain, while the Nifty 50 index ended with a gain of 0.47 per cent, or 51 points, to end at 12,770. Amongst Sensex stocks, Bharti Airtel was the best performing stock and rose 1.2 per cent.
“Positive sentiments on account of recent rally, continued FPI inflows and impact of gain in US markets overnight led to modest gains in Indian markets. Though trend in muhurat trading session does not determine that for the whole year, it gives a good feeling to start on a positive note,” said Dhiraj Relli, MD & CEO, HDFC Securities.
Buying shares on muhurat day is considered auspicious by some market participants. Nirav Gandhi, 52, said he is more circumspect on index stocks this year as the indices are back to all-time highs. “I bought shares from the mid-cap universe as I feel the returns from mid and small caps this year will be better than index returns.,” Gandhi said. Most investors indulge in ceremonial purchases. Institutional investors and brokers trade to price in global cues or key news developments if any.
Samvat 2076 was a roller coaster for markets as they were reeling under the onslaught of Covid-19. After hitting a new high in January, the indices fell almost 40 per cent. The pandemic was like a nail in the coffin to the markets which were reeling under a bunch of issues including low economic growth, corporate defaults and stress in the financial sector.
Many market participants said Samvat 2076 was reminiscent of 2008 financial crisis and the dot com bubble in 2002. However, the monetary easing by central banks across the globe and the advent of retail investors who became active in day trading due to lockdown induced restlessness helped the markets to bounce back.
And last week the indices hit new highs enthused by the election results in the US and progress in covid-19 vaccine trails. The monetary easing made a recovery was as swift as the fall. The benchmark indices have gained 70 per cent from their March lows to scale new all-time highs.
“With recent news on the progress of an effective vaccine against covid-19, we appear closer to the end of a difficult period. Despite a year where governments had to balance the physical well-being of citizens and economic stability, financial markets have largely worked efficiently. As the combination of fiscal and monetary stimulus kicks in along with a broad re-opening of the economy, we can expect earnings growth in a coming couple of years to be robust,” said S Hariharan, head – sales trading, Emkay Global Financial Services.
Corporate earnings growth will be the most crucial factor in driving the markets in the next year. While some analysts said that the trend of a handful of companies driving the markets could return.
“Within the index, the well-run companies were steady even in the wildness of the last 12 months. The polarisation theme prevalent in the last few years in our country of a dozen companies giving stellar returns and others struggling will continue. In a challenging environment, smart companies will sparkle and weak companies all by the wayside. And that is the consistent theme in the last five years,” Saurabh Mukherjea, Founder, Marcellus Investment Managers.
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# change on Mahurat day over previous close
Source:Exchange/Bloomberg
Compiled by BS Research Bureau
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