After a resounding rally over the past week, trading for Samvat 2083 got off to a quiet start in the special session on Sunday with the benchmark indices ending in negative territory. The auspicious session, which lasted just over an hour, saw a good opening with the Sensex rising by nearly 400 points and the Nifty 50 crossing 25,100 but stocks gave up early gains.
The Sensex declined 28.62 points, or 0.04% to close at 80,999.40, while the Nifty fell 43.95 points, or 0.18 % to 24,986.40, slipping below the 25,000 mark. The market breadth remained positive despite the decline in benchmark indices, with 3,127 stocks advancing against 917 declining and 193 remaining unchanged. The broader markets outperformed.
Market watchers believe that Samvat 2083 should be rewarding for investors with the markets being supported by good corporate earnings and foreign inflows. Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services said that after two years of stagnation, the market has the potential to give investors bumper returns by next Diwali thanks to the confluence of low valuation and high earnings growth.
“A potential crash in oil prices, a stable currency, the return of foreign investors, the moderation of AI hype and broad-based earnings growth will support higher valuation multiples,” Agarwal said. Some experts, however, cautioned that oil prices need to come down meaningfully before a bull rally plays out.
Ashish Kumar Chauhan, CEO, National Stock Exchange observed that Indian companies are expected to perform better to attract more investors. On foreign portfolio investors and representations related to the long-term capital gains tax, Chauhan said a few people outside India, in Singapore for instance have been talking about changes to tax rules. “In 2017-18, when long-term capital gains tax was introduced, they came to invest.
They left when the price-to-earnings multiple increased,” he told Financial Express on the sidelines of a press conference. A section of FPIs has called for the removal of long-term capital gains, as institutions pay tax according to their residency. They pay taxes based on where they are incorporated.
‘The renewed FPI interest is encouraging,’ Kamlesh Shroff, who heads the Association of NSE Members (ANMI), said. While global uncertainties and evolving market dynamics may influence short-term flows, India’s strong domestic fundamentals, robust investor participation and long-term economic outlook continue to make it an attractive destination for global investors,” he added.