Today on the 22nd Sept 2022 Indian stock markets reacted to the 75 bps rate hike by Fed. The hawkish commentary of Jerome Powell and his determination to arrest inflation on any cost (by rising rates till 4.6% till 2023 end) has not been taken positively by the markets. US Markets and other foreign markets were down and SGX Nifty gave negative cues in the morning. It was clear that Nifty and Bank Nifty both will open negative but it was interesting to see whether buying will happen or not at the dips? Indian Markets have shown great resilience thanks to Liquidity by FIIs and DIIs. China Plus One helped Indian Markets in last two years. Europe Plus One is helping in this year. Europe is facing high inflation and energy crisis. America is facing Slowdown and some countries are standing on the edge of Recession. Fortunately Indian Markets seems little decoupled by whatever is happening globally. Whether it is inherent strength of Indian Markets or just a bubble waiting to get burst only time will tell. Currently Rupee has depreciated to record levels, inflation is concern, and Stocks are trading at inflated valuations. None of these are affecting sentiments of Indian investors. 16500 has become very strong support level on Nifty. So even if Markets fall from here, we might see good buying opportunity only.
Samvat 2079 showed some really interesting stories in India. Stocks which outperformed in the year 2020-21 saw huge profit booking. Tata 1Mg’s disruption and increasing competition in pathology sectors saw heavy decline in stocks like Metropolis, Dr Lal Pathlabs and Thyrocare in this year. Hospital stocks too corrected heavily as Covid-waves were really mind than earlier waves. IT stocks which gained good traction during Work From Home culture of Covid-Times saw 20-30% corrections from their highs. Steel, Aluminum and Mining sector stocks which were roaring high due to increased prices corrected too. Surprisingly rate sensitive stocks like NBFCs and Banks kept Nifty and Bank Nifty managed to higher levels. Auto Numbers were better than last year and Stocks like M & M, Escorts were real winners. Adani Group stocks gave multi-bagger returns to their investors and made Adani second richest person in the world briefly on 17th Sept 2022. Analysts who used to say “Never go short on India” started saying “Adani ko short nahi karneka”. Credit Insights warning about Adani Group’s companies being ‘Deeply overleveraged’ was completely neglected by the Indian Retail Investors. Gautam Adani decided to cancel his plans to de-list Adani Power seeing how much trust retail Investors have in his stocks. In the year 2022, Boycott Bollywood and Cancel culture affected Entertainment and Films Distributions stocks adversely. Aviation stocks saw huge correction due to high Fuel prices and frequent incidents which affected safety of the passengers. Hotel and Amusement Park stocks saw good rise thanks to increasing footfalls. They even raised their Prices which increased their margins. Due to high inflation, investors are hiding in FMCG stocks like ITC, HUL etc. ITC moved faster than Rajdhani Express this year shutting mouth of all the Meme-Makers.
Now as the September months is about to end and Navratri and Dusshera is around the corner, we must focus on Festival stocks which can give good returns till Diwali 2022. Diwali is starting from 19th November this year. Stocksbaazigar believes that Defense Sector stocks, Adani Group stocks and Auto Sector stocks which are now highly overvalued might see some profit booking and other sectors which are directly or indirectly linked to Festival season will do good. Sugar sector stocks, Paper Stocks, have given good returns till date due to their high demand and low supply. So I am not mentioning them separately. But yes, Diwali is all about Sweets and Balrampur Chini stock should make your portfolio sweeter. Titan and Kalyan Jewellers might also do good. Tanishq is much aspired and trusted brand in this segment. Hence Titan will be my first choice. Stocks related to Shoes (Bata, Metro, Relaxo) and Clothes (ABFRL, Nykaa, Arvind, Raymonds) etc. can be kept on radar. People do buy lot of things on EMI during Flipkart Big Billion and Amazon Great Indian Festivals. Credit Card companies stocks, Bajaj Finserve and Bajaj Finance stocks etc. can be bought to play this story. Home Appliances made major buying Items during Diwali after Electronics and Clothing. So stocks like Dixon tech, Voltas etc. can be included for two months. In the Beverages, United Spirits can be accumulated. Remember you can hold it till New Year too. Other stocks like Logistics companies which have been corrected can make to your short term portfolio. All Cargo, Snowman logistics seems highly corrected. Diwali can never be completed without lights. Havells, Surya Roshni etc. neglected stocks might surprise you in the coming days. Many people prefer that their new vehicles should reach their homes on Dusshera. But booking of those happens almost 4-6 months ahead. So I don’t think Four-Wheeler can make to my list of Diwali stocks. But I can definity include Bajaj Auto, Hero MotoCorp and TVS in this list. In short, this year Diwali will be much bigger as India has came out of Covid completely. We saw how Ganesh Utsav was celebrated. I am expecting same enthusiasm and same joys in Diwali 2022. People may not be spending much in regular days, but they are spending good on Festivals in 2022 year. So let’s be bullish on Market irrespective of Global cues. We can make good Money till Diwali if we select right stocks and allocate right funds for them.
This is just a guiding post. You must do your own research or take advice from your Financial Advisor.
Disclaimer: Stocksbaazigar Mr.Deepak Doddamani is not a SEBI registered research analyst. He is NSE’s Certified Investment Analysis Professional, NSE’s Marketing Professional level – 4, AMFI registered Mutual Fund distributor, Authorized Person of IIFL Securities and MBA, B.Tech. He is active in market since 2009.