Samvat year 2078 has been far from an easy year in many ways for equity investors. Last Diwali, the Sensex was at 60000, but it touched a high of 61308. However, in the better part of the Samvat year, it remained below the 60000 level and closed finally at 59307.

Will things continue to stay choppy in the new Samvat year? Will global turbulence make things hairier before they get better? Many experts are making bleak predictions in what’s already been a tough year for the stock market.

I believe next year would give ample opportunity to the investors to make a good amount of wealth.

Before I get down to predicting for Samvat 2079, let’s revisit how past predictions performed.

Last Diwali, I made 12 bold predictions. They ranged from forecasting the auto sector’s outperformance to inflation remaining stubborn and compelling Central Banks to hike interest rates to LIC going public and a 65% probability that the Sensex will have negative returns. I am glad to inform you that 10 predictions were on the dot.

My 12 Predictions for Diwali 2023

1. Inflation would have either peaked or started to trend down.

The reason why I believe inflation will come down as central Banks across the world have begun increasing their interest rate aggressively. This will help to rein inflation. By next Diwali, the high-base effect will also come into play.

2. Interest rates would start sliding down.

If inflation starts cooling off, Central Banks, including RBI, will note the same. So I am expecting interest rates to start climbing down.

3. Crude would be at $90-100 per barrel.

India’s average crude oil basket last Samvat year was $97.14 per barrel. We expect the world economy to start improving, pushing crude oil prices slightly higher. Also, an opec+ supply cut would move crude oil prices higher.

4. The Chinese economy will continue to struggle.

Even though IMF predicted that China would grow at 4.4 per cent in 2023, we believe that the Chinese economy would struggle to cross even at 3 per cent as we believe China is passing through a structural problem.

5. Russia-Ukrainian war worries would have subsided.

Ukraine-Russia was started in February 2022. We don’t expect the combat to persist till next Diwali. Even if it continues, the market will have conquered its anxiety. No event in the market continues to impact sentiments for 21 months.

6. The rupee will be below Rs 80.

We believe that due to strong FDI and FII inflows, the rupee will strengthen from its present levels. This is despite at current levels, the rupee is at Rs 83 per dollar.

7. FIIs would have returned strongly in the next Samvat year.

Due to India’s solid economic resilience and the market’s potential to generate alpha, we believe FIIs would return strongly. They could pump about Rs 2 lac crores in the coming Samvat year.

8. EVs would have gained traction in the economy, selling four-wheeler EVs in lacs.

For FY2022, India sold less than 25k EV four-wheelers. However, we expect new launches to accelerate sales in the new Samvat year. Hence we will see more than one lac CVs being sold in the new Samvat year.

9. The US economy will emerge out of recession.

Irrespective of whether the US economy is in recession or could enter, its economy could perform better by the next Diwali. The fear of the US recession would have gone by the next Diwali.

10. The IT sector would emerge as the best-performing sector in the new Samvat year.

IT sector was one of the worst performers in the last Samvat year. However, things are improving as the attrition rate is expected to come down, and realisations are improving. As a result, there is a high probability that IT sector fortunes will reverse.

11. The market would not be as volatile.

The last year was highly volatile. But the new Samvat year is not expected to be as volatile as last year. We expect a steady rise in the Indices.

12. The market mood will be buoyant, with an 80 per cent probability that the Sensex will be higher than its current levels.

The historical trend suggests that no two years in a row market has declined from one Diwali to another. Therefore, with all negative things priced in, there is a high probability that Sensex will close in the green zone with returns in the teens.

Investors faced a lot of pain last year. It’s time for them to enjoy the gain of the market. The best time to invest is when the market is full of negative news. Right now, recession, higher inflation and rising interest rates are bothering the market. These factors may not be there next year same time. That makes me believe that risk-reward is in favour of reward. So brace the new Samvat year with optimism.