Good days and trade, too

Samvat 2070 ended with gains of 26.37 per cent for the BSESENSEX and 26.76 per cent for Nifty. These gains have not been seen in the last five years. The primary reason for the gains was of course the change in sentiment post a stable government; helped by the fact that sentiment and confidence were at really abysmal levels, earlier.

The Bombay Stock Exchange (BSE) building is illuminated for Diwali

Improvements
There has been improvement in GDP, inflation has come down to some extent, the rupee has been stable and a great relief has been falling crude prices. So far so good and with FIIs continuing to invest with inflows of about Rs 1.1 lakh crores, things are under control.

Actress Kajal Aggarwal joins traders in ringing the bell during special trading (Mahurat Trading) on the occasion of Diwali. Pics/Shadab Khan

Markets opened on a buoyant note and remained in positive territory throughout. The markets traded in a fairly tight range and gained 63.82 points on the Sensex and 18.65 points on the Nifty. Trading on this day is by and large symbolic in nature and the key feeling one got was the underlying bullishness and expectations that things will continue to improve going forward.

Chopda Pujan being performed at BAPS Swaminarayan Mandir in Dadar, yesterday. Pic/Atul Kamble

What does SAMVAT 2071 have in store for the investor and the country? With victories in Haryana and Maharashtra, the political scene is changing, and one should expect that opposition parties will think twice before rejecting bills in the Rajya Sabha simply because they are in the opposition. Rejection or defeating of bills would only be on merit.

The ordinance on coal blocks coming in less than four weeks after the Supreme Court announced its order of cancelling coal blocks is history by itself. The government has set things in motion and e-bidding of coal blocks would bring complete transparency and improve the investment climate.

Predictions
Going forward I am bullish on the Indian economy and expect markets to be in a buoyant mood by and large. Another bumper year of 25 per cent plus gains may be asking for too much, but as reforms are introduced and investors whether foreign or domestic get convinced that new PM Narendra Modi means business, there is no stopping investment flows.

If we get inflows of say 1.8 lakh crore or upwards, there could be a great year for the markets. This kind of inflow is possible if the government manages to hard sell its divestment programme and gets active participation from foreign institutional investors.

Key sectors which look good for investment are infrastructure, textiles, oil marketing companies and capital goods. Banking sector would benefit in the medium term but there is quite a bit of pain in the short term on account of non-performing assets and some more on account of coal blocks being cancelled.

Samvat 2071 should be a good year for Indian capital markets and one should look to invest with returns expectation to be kept at the long term average of about 15 per cent. This could actually turn out to be better or higher, but tempering expectation and faring better is always a great way to do things. Many positives are expected in the coming weeks.

Wishing all a Happy Diwali and Prosperous New Year!