With Dhanteras behind us, many are eagerly awaiting the highly anticipated Diwali Muhurat trading session for a fresh financial beginning. This special trading window, marking the start of Samvat 2081, is more than just a symbolic tradition—it presents a propitious opportunity for market participants to establish the groundwork for a successful year of investments.
Given the current near-historic highs of both the Sensex and gold, investors are challenged to balance their portfolios effectively. The lingering global uncertainties and sustained market volatility only further complicate this balancing act.
On the other hand, the Indian equity market has delivered attractive returns to investors so far this year. In 2024 alone, year-to-date returns have reached 11.02%, reflecting the resilience of Indian equities in a volatile global economic environment. The Nifty index reached a high of 26,277, but recent declines have dampened the rally due to outflows from Foreign Institutional Investors (FIIs) exceeding Rs 90,000 crore in October alone.
Where should you invest?
Gold ETFs, silver ETFs, Nifty and the Sensex are witnessing a record run this year delivering 30 per cent, 28 per cent, 27 per cent and 25 per cent, respectively. Investing in gold is essential for diversifying your portfolio. This can be especially beneficial during market downturns, as gold prices typically increase when other assets decrease. Furthermore, gold offers a stable investment opportunity for individuals seeking to safeguard their wealth in the face of market fluctuations and geopolitical uncertainties.
“Gold remains buoyant on festive demand in India, with added momentum from market bets anticipating a Trump victory in the upcoming U.S. election. This optimism has led to a surge in liquidity in gold markets. Traders are eyeing Rs 78,200 as immediate support; a fall below this level could push prices down to Rs 77,000. On the higher side, the Diwali target is set at Rs 80,000, reflecting a strong sentiment for further gains amidst festival season buying,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
“As market volatility and economic uncertainty drive investors toward safe-haven assets, Gold and Silver ETFs have become essential tools for portfolio diversification. These precious metals serve as effective hedges against inflation and currency fluctuations, while their low correlation with equities can reduce overall portfolio risk. Silver, in particular, has seen growing demand due to its dual role as a precious and industrial metal. By investing in Gold and Silver ETFs, investors benefit from easy liquidity, professional management, and lower costs, making them a practical and tax-efficient addition to any balanced investment strategy,” said Chintan Haria, Principal- Investment Strategy, ICICI Prudential AMC.
The stock market, in contrast, is renowned for its volatile nature. Haria had previously stated that domestic markets are highly priced and at risk of corrections, with additional unpredictability stemming from global tensions and concerns about economic growth. In such circumstances, utilising Systematic Investment Plans (SIPs) can be an advantageous strategy. SIPs enable investors to take advantage of market downswings without the necessity of perfectly timing their investments.
“Looking ahead to Samvat 2081, we anticipate that the Indian market will continue to trend upward, aiming for the 28,400 level by Diwali 2025. This target aligns with the rising trendline on the yearly chart that connects major highs since 2014, as well as the measuring implications of previous significant rallies. However, the upward movement is expected to be accompanied by volatility rather than a straight path. We believe healthy correction will make the market healthy for long-term up trend,” said Bajaj Broking Research Team.
Rochak Bakshi, Founder & CEO of True North Financial Services, stated that the Indian stock market remains robust despite minor setbacks. He emphasized that the growing retail involvement is expected to propel the market forward. Bakshi also noted that the previous year yielded impressive returns, suggesting that investors may have capitalized on future gains.
“Our expectation for returns in the coming year should be much more grounded. This in itself is not bad as the markets need to consolidate before any upwards movement again,” Bakshi said.