Indian share markets will be open for a one-hour special Muhurat Trading session on November 4, the day of Diwali, to mark the beginning of the Hindu New Year 2078.

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In this session, investors usually make token purchases or sales of shares as the day is considered to be auspicious.

Deepak Jasani of HDFC Securities believes the general mood of the market is bullish, the chances of indices closing in the green are higher.

“Since the depth of the scrips is limited and volumes are thin, index moves are sharp either way in the limited time period. Typically, the mood is bullish, hence chances of an up-close are higher,” Jasani said.

Muhurat trading session is an age-old tradition and its timings are based on planetary positions. This year, the session will commence at 6 pm and conclude at 7:35 pm. The pre-open session will kick off at 6 pm, end at 6:08 pm. The main session will begin at 6:15 pm. And the post-closing session will be between 7:25-7:35 pm.

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Yesha Shah, Head of Equity Research, Samco Securities said that this Muhurat trading will be largely influenced by the outcome of the Federal Reserve's meeting. Federal Reserve's two-day meeting will conclude Wednesday and analysts expect the central bank to announce reducing the amount of bonds it buys every month in a process known as tapering. It currently buys treasuries worth $120 billion a month.

Federal Reserve started buying treasuries in response to the coronavirus outbreak of 2020 when the economies had to be shut down. That and it slashed its benchmark interest rates to near-zero. But now, the Fed may think it is time to start pulling the support it lent to the economy.

Shah believes if the Fed's stance is in line with market expectations, the indices might continue their upward journey, with some green shoots appearing as investors celebrate the festive season.

Samvat 2078

Over the past year, benchmarks Sensex and Nifty have rallied nearly 50 percent in the past year. To expect this performance this Samvat is not fair, experts said.

“Last Samvat's returns have come on the back of a very low base, so it may not be fair to expect similar returns in the coming Samvat, even if we were to expect a continued flow of liquidity as well as an increase in new investors,” Anand James, Chief Marketing Strategist of Geojit Financial Services said. That said, James added, the key to healthy market returns is asset sectoral allocation.

Plus, in the previous year, we came off a very depressed market and at the time, “valuations were beaten to a pulp,” Vinit Bolinjkar of Ventura Securities said.

Since then, we have witnessed a V-shaped recovery, and are now sitting at rich valuations, Bolinjkar said.

Jasani echoed the sentiments, adding that “return expectations have to moderate in the year going forward and we may see large moves on both sides in the coming year.”

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Positioning portfolios

Bolinjkar recommends real estate, export, telecom, technology andn defence plays.

“Keep in mind three things: strong competitive advantage, good promoter quality, and very good capital structures, along with liquidity,” Bolinjkar said.

Anand James said investors should have a well-diversified portfolio and should invest in sectors. Avoid weak names and companies with a balance sheet or corporate governance issues, he said.

“Amongst sectors, we are very positive on the banking sector as we believe that the worst is over for the sector. We expect a pick-up in credit growth along with significant improvement in asset quality and decline in credit costs in H2FY2022, which should lead to a rerating for the sector” James added.

While James is positive on banking, he expects sectors like aviation, consumer durables, hotels, multiplexes, and real estate to do well going forward due to the reopening of the economy and pent up demand.

Shah of Samco Securities is positive on BFSI space considering “positive result surprises, improving collection efficiencies, stabilising asset qualities and financialization of domestic savings,” she said. “We currently like State Bank of India, Asian Paints, LIC Housing Finance and CAMS as investment ideas to ride the rally the next year,” Shah added.

Angel One is positive on banking space, with AU Small Finance Bank, Federal Bank, and HDFC Bank being its best bets. It believes Lemon Tree in the hospitality space can do well. In the consumption space, the Jyoti Roy of Angel One has a buy rating on Safari Industries, Amber Enterprises, Ashok Leyland, and Suprajit Engineering.

(Edited by : Santosh Nair)