Samvat 2073 got off to a muted start, with Sensex edging lower in the special 1-hour Diwali Muhurat trading session on Sunday.
The Sensex settled 11 points lower at 27,930 while Nifty declined 12 points to 8,626.
Losses in select banking, FMCG and power stocks weighed on Nifty. Among the top losers in Nifty50 stocks, ITC fell 0.7 per cent, HDFC declined 1 per cent and HDFC Bank slipped 0.5 per cent.
Among the top gainers, Lupin rose 2 per cent while Tech Mahindra gained 1 per cent.
The midcap and smallcap stocks outperformed with BSE midcap and smallcap indices rising 0.5 per cent and 1 per cent respectively.
Analysts expect Indian markets to remain volatile ahead of US presidential elections on November 8. “The countdown for the US Presidential election will also begin from the next week, which may further add to the volatility across the globe,” said Jayant Manglik, president of retail distribution at Religare Securities.
Indian markets will also take cues from the quarterly earnings and the monthly auto sales data to be released from next week. On the global front, the US Fed will meet on November 1-2, which will further add to volatility in Indian markets. The US central bank is expected to keep rates steady as the meeting falls days ahead of the US presidential election.
Analysts say that earnings of India Inc remain crucial for Nifty’s fortunes in Samvat 2073. In Samvat 2072, Nifty gave 10 per cent returns.
Mehrab Irani of Tata Investment Corporation says if Nifty has to re-rate then earnings from large-cap companies have to grow at a faster pace. He maintains his bullish view on passenger vehicle and two-wheeler companies in auto space. Mr Irani is also bullish on private sector banks which focus on retail customers and select non-banking finance companies.
Sanjay Sinha, founder of Citrus Advisors, likes stocks in the consumption space. Implementation of Seventh Pay Commission awards has given a strong boost to domestic consumption and a good harvest after a good monsoon will give a further fillip, he adds.
Raamdeo Agrawal, joint MD at Motilal Oswal Financial Services, says Indian stock markets could surprise on the upside in the next 12 months. He likes select stocks in private banking, auto, consumer durable and pharma space.