Samvat 2079: Factors that will drive Indian markets till next Diwali

Samvat 2079 is expected to be much brighter and more promising as the Indian equity market would continue its outperformance as compared to global peers, several analysts estimated. With commodity prices cooling off, they expect inflation may soften, similarly, the rate hike cycles may also peak going forward.

Axis Securities believe that the relative outperformance of the Indian market will likely sustain in Smavat 2079 as well and would be led by favourable macroeconomic factors and better-than-historical fundamentals of Indian corporates.

“Good monsoon, higher reservoir levels, cool-off in commodity prices, and healthy job/labour market cumulatively indicate that the domestic economy would accommodate the prevailing inflation rather smoothly”, the domestic brokerage said in a report on Samvat 2079 expectations.

Similarly, normalization of discretionary services spending, easing supply chain, and weakening of global commodity prices including crude and supportive fiscal policies will drive the markets in Samvat 2079, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities told Zee Business.

He added, “The overall economic indicators in India also continued to show positivity and urban demand showing reasonable strength. Rural demand is starting to see green shoots.”

While HDFC Securities through its report on Samvat 2079 expectations noted, “India is largely a domestic consumption-led economy, now trying to expand the manufacturing footprint with the help of schemes like PLI (Production Linked Incentive).”

The domestic investment cycle is exhibiting signs of a revival, and with normal monsoons, the foundation has been laid for the economy to regain its earlier rates of growth, the domestic brokerage said, adding that “We may be close to a peak in the rate hike cycle”.

The market expert Roop Bhootra, who is CEO, Investment services, Anand Rathi Shares and Stock Brokers told Zee Business, “mostly domestic macro factors would be driving the markets in the medium term and also could act as a buffer in case there is any short term increase in global volatility.”

Senior Research Analyst at Equitymaster, Brijesh Bhatia pointed out that the commodities prices had led to inflation higher, and to control it, the easy tool is raising interest rates. He added, raising interest rates invited the flow of money from equities and commodities to debt markets.

“By early 2023, the US markets are likely to reverse and an outperform Indian markets may continue to head higher," Bhatia told Zee Business in its Samvat 2079 expectations.