Diwali 2023: Nifty 50 may see healthy gains in Samvat 2080. Which sectors should you bet on?

But risks remain. Geopolitical uncertainty and crude oil prices remain a concern, while at home, General Elections, inflation and the trajectory of interest rates are the main risks.

“Any possible mandate from the upcoming General Election, leading to political instability or any possible spike in global oil prices (due to a strong recovery in global economic growth) significantly above $120 a barrel, Sensex will fall below 55,000. risk factors for the domestic market in the next year,” said G. Chokkalingam, Founder and Head of Research at Equinomics Research.

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However, Chokkalingam believes that the domestic equity market could rise by 15 percent and the Sensex could rise to 75,000 percent next Diwali.

“GDP growth of over 6 percent would be a major impetus for this gain. Growth over 6 percent would be the fastest among the major economies in the world and therefore, we can expect with significant net inflows from foreign portfolio investors (FPs),” Chokkalingam said.

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Bright outlook for Nifty 50

After more or less Q2 results, concerns about market valuations have also eased. Some experts believe that with healthy economic growth, India Inc.’s earnings will rise. will also maintain the high valuations of the domestic stock market. Keeping this in mind, experts see a healthy double-digit growth in the Indian market by Diwali 2024.

“Although Indian markets look expensive compared to other emerging markets, we do not think the current valuation is expensive as India offers a structurally sustainable story with the potential to reach $5 trillion GDP soon .We expect markets to deliver a return of around 15 per cent next Diwali due to strong corporate earnings, strong domestic flows and reformed government measures,” said Manish Chowdhury, Head of Research at StoxBox.

Brokerage firm Motilal Oswal Financial Services Despite global uncertainties, India believes that India is a bright star and is expected to maintain its excellent performance.

“Nifty is trading at a 12-month forward (price-to-earnings ratio) of 17.6 times, which is at a 13 percent discount to its 10-year average, which provides comfort. A few quarters, sector rotation could be is an important driver along with the overall market reform,” said brokerage firm Motilal Oswal.

Also Read: Diwali 2023: Can Nifty 50 hit 25,000, Sensex touch 75,000 in Samvat 2080? Here’s what experts say

According to Motilal Oswal, (1) elections at the state level in November-December 23, followed by the General Election in May 2024, (2) global factors such as economic growth, interest rates, bond yields, inflation, geopolitical issues, etc. . ., and (3) Nifty earnings, which are expected to maintain their healthy growth at 18 percent CAGR over FY23-25 ​​are the key themes for the market for Samvat 2080.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services Believes that the market could witness a major rally before the next Samvat.

Once there is some clarity on the outcome of the next general election due before May 2024, the markets will rally,” Vijayakumar said.

“India’s resilient economy and good corporate earnings will attract large investments into the market. If US bond yields continue to decline, FPIs will also be buyers in the market. A bull case is all about institutional money – both domestic and foreign. – and a stable government that starts a major market rally taking the Nifty over 23,000 percent next Samvat,” Vijayakumar said.

Which sectors should you bet on?

Deepak Jasani, Head of Retail Research at HDFC Securities in favor of domestically oriented firms and opportunities are seen in sectors such as materials, pharmaceuticals, oil & gas, small finance banks, petrochemicals, consumption, power EPC and restructuring plays for the next year.

Vijayakumar of Geojit Financial Services believes that large caps across sectors will lead the crowd.

“Financials, capital goods and auto are likely to be the top performers. In IT, midcaps will continue to outperform large caps,” Vijayakumar said.

Chowdhury of StoxBox said the top performers in the sector for next year are autos, cement and IT.

“We believe a strong order book, premium trend and expected recovery in rural demand would provide a tailwind for the larger auto space including passenger vehicles and two-wheelers,” Chowdhury said.

“Improved pricing in the cement industry and the expected increase in volume due to the government’s focus on infrastructure in the election year would keep cement companies safe in the next one year, said Chowdhury.

“The IT sector would be a contrarian sector bet as we believe that most of the price negatives are already in and improved operating performance and a strong order pipeline for the recovery of the IT sector going forward,” said Chowdhury.

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Disclaimer: The above opinions and recommendations are the opinions and recommendations of individual analysts, experts and brokerage firms, not those of Mint. We encourage investors to check with certified experts before making any investment decision.

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Updated: 08 November 2023, 02:13 PM IST