Indian markets have been on a roller coaster ride for the past couple of weeks where the movement in the benchmark index has been very volatile with wild swings exhibited on both sides. Nifty has been revolving in the broad range tracking the global indices where the US markets have been under a bear grip after the Federal Reserve, which is the central bank of the United States has increased the rates for the third consecutive time. The rising inflation and slower growth have been the major factor behind such increases in the rates.
On the domestic front, the equity markets are having one eye on the international cues and the second eye is on the festive season which has started with the start of the holy days of Navratri and ends with Christmas at the end of the year.
Traditionally, the festive season in India has been considered the most auspicious time and business activity makes a shift in gear during these times. The consumption activity is expected to increase as people spend on items like vehicles, household items, real estate, building materials, clothes, and other essential things.
Indian corporates are also having a close eye on this festive season to cash in the pent-up demand of the corona period last year. The retail sales are expected to be bumper this year as consumer footfall is expected to increase after 2.5 years of pandemic time where the common people have curtailed their shopping due to uncertain times.
The ongoing online sales from Amazon and Flipkart are also witnessing bumper demand in all the major product segments indicating that the on-ground consumer sentiment is still strong even after rising inflation and slower expectations of growth. On the other hand, the demand for consumer products like phones, electronic goods, air conditioners, and electric vehicles is also on the rise in the festive season.
From the equity market point of view, we expect this festive season to boost the sales of the corporates and rejoice in the sluggish sentiments on the street. Below are the sectors which may get some boost if the festive season gathered good momentum:
- Consumer Durables
- Housing Finance companies
- Retail and Textiles
- Building materials
Long-term investors may keep a close eye on the above-mentioned sectors and leaders in the same and add on to their portfolios on every correction. Indian markets will be under the grip of extreme volatility amid global market weakness, rising inflation pressures, and the weakening rupee but the overall sentiments on the street are expected to be optimistic in the near-term period. Short-term traders may keep their existing positions hedge to save themselves from global volatility.