Samvat 2077: How major stock market indices fared since last Diwali

The past one year has been absolute delight for the investors as the markets generated a never like return during Samvat 2077. Between November 13, 2021 and November 2,2021, the major indices gained immensely, well supported by stocks from varied sectors and exuberant participation of retail investors.  

Among the major indices, between the aforesaid period, Benchmarks Nifty 50 and Sensex gained 41 per cent and 38.2 per cent, as per Zee Business TV report.  Meanwhile, Nifty Bank clocked 40 per cent, Nifty Midcap 100 and Nifty Smallcap 100 garnered 70.4 per cent and 81.5 per cent respectively during the same period.  

What Lifted the Market Sentiments  

Speaking on what led to this stellar show put up by these indices and stock market in general, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said abundant liquidity, low-interest rate, good performance of the corporate sector, almost unaffected by the pandemic were some of the factors that lifted the market sentiment. "From last Diwali till date the Nifty is up around 42 percent," said the expert.  

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He said that fundamental support to the market rally has been from the steadily improving corporate results, which indicate a sharp turnaround in India Inc's performance, which in turn, has been aided by the cut in corporate tax and a steep decline in interest rate.  

Exuberant participation by Retail Investors

He pointed out that the notable feature of this rally was aggressive participation by retail investors. "The notable feature of this bull rally, which has not seen a major correction so far, is the exuberant participation of retail investors. The total Demat accounts in India has now crossed 6 crore with 1.42 crore getting added in FY21 alone. Retail investors now account for 45 per cent of cash market transactions and is enthusiastically buying everything that FIIs are selling," said Geojit Financial Services Chief Investment Strategist.  

The strong role played by the retail investors was evident from the fact that despite the big FII selling of Rs 11308 crore in July and Rs 13550 crore in October, the market did not get affected much, the expert highlighted.  

"In brief, retail investors are the dominant players in the market now. We don't know how long this will last since valuations are stretched and many foreign brokerages have downgraded India on excessive valuations," said Vijayakumar.  

Keep expectations in check for Samvat 2078: Experts  

As the market gave massive returns, the investors should not have wrong notion that it will continue to fetch similar returns going forward.  

"Investors should expect only modest returns for the coming Samvat. It would be safe to remain invested in high-quality stocks in performing sectors like private sector banking; leading names in the mortgage, fintech and financial services; IT and construction-related segments," said Geojit Financial Services strategist.  
Prem Prakash, CEO CapitalVia Global Research Limited, said "In Samvat 2078, markets may not maintain the same pace and see some profit booking at higher levels. However, we expect the sector and stock specific action to continue."