Wishing you all a Happy and Prosperous Diwali!
Equity markets worldwide had a roller-coaster ride in Samvat 2076, which inherited slowing GDP, looming NBFC issue, rural consumption slowdown, and geopolitical tensions. However, corporate tax cut and several other supply and demand-side reforms were introduced by the RBI and the government in H1 FY20, giving momentum to the market in Q4 FY20. But, in March, the COVID-19 pandemic, a Black Swan event, triggered a major disruption. The focus from growth was changed to 'jaan hai to jahaan hai.' From the high of 12,430 in January, Nifty tested the 7,500 level in March.
Though the corona cases were increasing, the forward-looking talks around vaccine development, a V-shape recovery in 2021, stimulus packages by the government, pro-active measures by RBI and central banks globally changed the scenario for the financial market. By June, Nifty was back at the 10,000 level. The mantra was changed to 'jaan bhi jahaan bhi.' On November 9, Nifty made an all-time high of 12,474. As we light dias and welcome Samvat 2077, all eyes will be on a vaccine and the revival of the global economy, which market may be pricing in before the numbers speak.
On the sectoral front, Nifty Realty (-48%) and Metal (-47%) declined the most during February/March sell-off. Once the market reversed, Nifty IT (+80%), Nifty Pharma (+77%), and Auto (+70%) showed strength.
Overall, Q2 FY21 results have turned out to be strong and better than expected. There are signs of demand revival in auto sales, GST collection, e-way bill generation, and positive management commentary in Q2 analyst meet by most of the leading firms. Consumer-centric segments, such as FMCG, paints, building material, reflected a sharper recovery and have either reached or are closer to pre-COVID levels. Also, good rainfall, higher water reservoir level, higher MSP, and other government initiatives to boost the rural economy can fuel growth. Nifty50, midcap, and smallcap indices are up 7–10% since last Diwali (till November 9). MSI model portfolio has outperformed, with gains of more than 25%.
Download our full report Top Diwali Stock Picks for Samvat 2077.
Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.