As Indian traders navigate the volatile markets this Diwali, Mint looks at how Indian equities have done since the last Samvat—which sectors have beaten the benchmark, the winners and laggards among stocks, and what investors can expect in the medium-term.
When is the Muhurat trading session?
Bourses will open for a special one-hour Muhurat on Friday, celebrating a Diwali ritual unique to India’s stock market. Both the National Stock Exchange and the BSE will be open between 6-7pm—this year’s auspicious trading hour. Including pre-open, block deal and closing sessions, among a few others, markets will be open from 5.45 pm to 7.20 pm to celebrate the start of the Hindu calendar year Samvat 2081. Since the last Samvat, the Nifty 50 has risen 25% owing to continued momentum in GDP growth, robust corporate earnings and copious liquidity, churning out some winners and losers in the process.
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Which stocks brought the best Diwali gifts?
Tata-owned Trent remains the undisputed investor favourite for the second straight Samvat year, this time returning 191% since last Diwali. The fashion and lifestyle retailer is bucking the current slowdown in consumption with its affordable portfolio of products—a great hit in the mass market. A new entrant, Bharat Electronics, is the runner up as it delivered a solid Q2 performance, beating analyst estimates, similar to Bharti Airtel. Others include Mahindra & Mahindra and Bajaj Auto as the growth potential of their premium and green portfolios continues to drive investor optimism about the auto sector.
And which counters missed the mark?
Leading the losers is IndusInd Bank, falling 30% in the last one year, especially after reporting higher provisions for unsecured bad loans in Q2. Bajaj Finance trails the private bank, as the broader financial services industry reels under the pressure of flight and lack of deposits. Titan Co. and Nestle India represent the lagging consumption pack.
What about sectoral performance?
Despite a slowdown in the public sector enterprises rally this year, the Nifty PSE index has emerged as the top sectoral index, returning almost 60% since last Diwali. Investors continue to back sectors with ample government support and strong demand visibility, which also includes Nifty Realty. While healthcare and pharma offer exciting growth opportunity, the financial services industry’s outlook looks bleak. HDFC Bank has been a drag while Nifty Media is the only index which has offered negative returns.
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Can investors expect a brighter future?
Some pockets still offer exciting long-term growth prospects, say experts. The premiumization trend, a pick-up in private capital expenditure and strong corporate balance sheets are anchoring their optimism. “We believe stock returns may lag earnings growth in sectors that have seen large re-rating over the past 3 years,” R. Janakiraman, CIO of emerging market equities—India at Franklin Templeton said, citing opportunities “across financials, IT, autos, construction and consumer services.”
