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Investors who bet on Sensex after it closed with a 0.5 per cent gain on Muhurat-day last year may be a disappointed lot now. In the year since last Muhurat, Sensex has corrected 19 per cent. Will the market deliver returns in keeping with the Muhurat sentiment this year? We do not know.
But here are some numbers that offer clues to the market direction in the week just after Muhurat.
In nine of the ten muhurat sessions of the past the market has taken a U-turn after Muhurat. When there was a pre-Diwali rally, the market has corrected after Muhurat. The reverse held true for a pre-Muhurat fall.
Momentum short-lived
In last five trading sessions Sensex has gained close to 200 points. However, if the past is anything to go by, the festival momentum may not last long. Sample these numbers: In the week up to Diwali in 2009 the Sensex made a 4 per cent gain, but in the following week the index closed 3 per cent down. In 2010 again, there was a rally pre-Diwali and Sensex gained 4.9 per cent. The following week however most of the gains evaporated and the Sensex closed 4 per cent lower.
Expectations on this Muhurat-day
Market observers aren't very positive about the market's direction on the muhurat session this year on Wednesday. Mr D.K. Aggarwal, Chairman, SMC Investments and Advisors, said, “There is a gloomy mood in the market. This year Muhurat trading may not be that exciting as last year.” Some fund managers, however, believe that there are a good number of value picks for investors in the large and mid-cap space from a one-year perspective. Mr Sandip Sabharwal, CEO- Portfolio Management Service, Prabhudas Lilladher, said, “The markets on an overall basis are looking cheap at this point of time and mid caps are extremely cheap. Investors can buy into any strong and well established mid-cap companies during muhurat trading. In the large-cap segment I would be positive on Automobiles, Telecom and Private Sector banks as segments to buy into. I do think that as last Diwali was a time when markets turned from a Bull to Bear market we could see a reversal post Diwali this year.”
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