NEW DELHI: Diwali is here, and investors are looking ahead to Samvat 2083 with one key question: what lies ahead for Dalal Street in the new year? While India's domestic growth outlook remains encouraging, global uncertainties and market volatility could keep investors on their toes. Market participants are therefore advising investors to be selective with their stock choices and keep their return expectations realistic.
Kotak Mahindra Mutual Fund expects moderate returns from equities in the coming Samvat. In its annual 'Muhurat Picks Samvat 2083' presentation, the fund house advised investors to focus on quality companies, maintain a balanced portfolio and stay invested for the long term rather than chase short-term market rallies. It also cautioned that geopolitical tensions, changes in crude oil prices and the cautious approach of global central banks could keep markets volatile over the coming year. A long-term investment approach, it said, would help investors navigate these uncertainties.
Despite global concerns, India's domestic growth outlook remains positive. Kotak Mutual Fund expects the country's GDP to grow 7.1% in FY27, with domestic demand continuing to support corporate earnings. High-frequency indicators also point to a broad-based economic recovery. However, the fund house believes investors should not expect exceptionally high equity returns in the new Samvat. Moderate returns, it said, are a more realistic expectation for the broader market. There is also some valuation comfort in large-cap and mid-cap stocks. According to Kotak Mutual Fund's presentation, major market indices were trading below their long-term average valuations as of October 31, 2026. This comes after an uneven performance across equity market segments since the previous Diwali. Data covering October 20, 2025, to October 31, 2026, showed divergent movements in the Nifty 50 TRI, Nifty Midcap 150 TRI and Nifty Smallcap 250 TRI, with mid-cap and small-cap stocks experiencing sharper volatility during the period. Meanwhile, analysts at domestic brokerage Motilal Oswal Financial Services (MOSL) said Nifty valuations were attractive at 17.5 times forward earnings, around 16% below the long-term average. Small-cap stocks, however, continued to trade at a 25% premium to their historical average. The brokerage expects earnings growth to recover over the coming years. Nifty earnings per share are projected to rise 16% and 14% year-on-year in FY27 and FY28, respectively, compared with 5% in FY26.
For the new Samvat, market experts favour banking and financial services, capital markets, manufacturing, global outsourcing and exports, consumption and digital businesses. They also see opportunities in healthcare devices, aerospace, auto components, pharmaceutical ingredients, garments, port cargo, organised jewellery and quick-commerce platforms. Against this backdrop, Kotak Mutual Fund's investment strategy centres on identifying quality companies and maintaining disciplined asset allocation. The fund house has advised investors to remain focused on their long-term investment goals instead of trying to benefit from short-term market movements. It has also recommended that investors align their mutual fund choices with their individual risk profiles and seek guidance from financial advisors before making investment decisions.
As investors prepare for the special Diwali trading session on Sunday, market experts have called for a cautious, stock-specific approach. With benchmark indices approaching key resistance levels, limited liquidity during the session could amplify market movements, they said. Muhurat trading is traditionally considered an auspicious occasion to begin investments and review financial portfolios. However, experts have cautioned investors against making impulsive decisions driven by festive sentiment. Instead, they have advised them to focus on company fundamentals, valuations and long-term financial goals. The approach, experts said, should differ depending on the investment horizon. Long-term investors can use the occasion to review their asset allocation and selectively accumulate fundamentally strong stocks. Short-term traders, meanwhile, should monitor technical levels and global cues before taking positions. For those entering the stock market for the first time, experts recommend starting with small investments in fundamentally strong companies and adopting a long-term holding approach. They have also advised against buying stocks simply because the occasion is considered auspicious. Given the possibility of lower liquidity during the limited trading session, investors should avoid placing large orders or trading aggressively, experts added.
The cautious approach also comes as both benchmark indices approach crucial resistance zones following a recent rally. Market experts expect trading to remain sideways to consolidative during the Muhurat session. Trading around 24,600, Nifty has immediate support at 24,350, while resistance is placed in the 24,700-24,800 range. Experts have also flagged the possibility of profit booking after six consecutive sessions of gains. Geopolitical concerns, crude oil volatility and weakness in global markets could add to the pressure. As Samvat 2083 begins, the broader advice for investors is to keep return expectations realistic, remain selective with stock choices and stick to disciplined investment strategies rather than get carried away by short-term market movements.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
