The Indian equity market has witnessed high volatility in the first half of the calendar year 2022, thanks to the Russia-Ukraine war, foreign fund outflows, boiling inflation, and aggressive interest rate hikes by central banks across the world. However, the market has revived since July amid exuberance around IT, energy, FMCG, and metal stocks as well as foreign fund inflows despite talks of recession and a downward revision of the economy’s growth.

Overall, there is a sharp contrast between this Diwali and the last one as the BSE benchmark Sensex touched a record high of 61,000 levels ahead of Diwali last year and was projected to hit 65,000 marks by October this year. However, the Russia-Ukraine war and the resulting spike in energy and food prices triggered a sell-off globally and halted the Sensex rally. In Samvat 2079, the NSE Nifty and the BSE Sensex crossed the 18,000 and 60,000 marks, respectively, multiple times but due to uncertain global cues and continued profit booking at higher levels from foreign institutional investors (FIIs), it failed to sustain above the same. After a roller-coaster price action, the Nifty and Sensex are currently hovering around the 200-day SMA (Simple Moving Average) at 17,500 and 59,000 levels, respectively.

In the last 1 year (till October 20), the BSE benchmark Sensex and the broader NSE Nifty delivered a negative return of 2.8% and 3.4%, respectively. However, the domestic benchmarks outperformed the majority of the global indices, with Hong Kong’s Hang Seng index falling by 34.5%, S&P 500 index losing 23.7% and Germany’s DAX nosediving 24.8% during the same period.

In the near-term, the BSE benchmark Sensex is expected to cross the 66,000 marks, while the broader Nifty 50 is projected to hit the 20,000 levels, according to a report by Kotak Securities.

In light of these positive indicators, analysts have recommended some top stocks to buy this Diwali for a period of one year, based upon strong technical patterns from the universe of NSE F&O and CASH counters.

ICICI Direct

The firm believes that corporate India will likely deliver earnings growth in excess of 15% over the next two years given the current economic milieu and provide a plethora of investing opportunities in Indian markets. However, sticky global inflation will keep central banks hawkish and India will be no exception. Similar implications for global liquidity flows may create medium-term volatility in Indian markets, it said. The agency has given one-year year Nifty target of 19,425 (21x FY24 EPS) with sectoral bias towards banks, capital goods/infrastructure, auto, avoiding sectors having more global exposure like IT, oil & gas, and metals.

“Given the scenario, we see reasonable opportunities across the market spectrum with key filter being quality. We continue to advise investors to utilise equities as a key asset class for long term wealth generation by investing in quality companies with strong earnings growth and visibility, stable cash flows, RoE and RoCE,” it said.

Analysts at ICICI Direct have recommended Axis Bank, City Union Bank, Apollo Tyres, Eicher Motors, Coforge, Lemon Tree Hotels, Healthcare Global Enterprises, Laurus Labs, Container Corp and Havells India as their Muhurat 2022 picks.

Prabhudas Lilladher

Analysts at Prabhudas Lilladher continue to prefer companies with a presence in emerging segments, strong balance sheets, and business moats.

Among largecap picks, the brokerage has recommended Apollo Hospitals Enterprise, Avenue Supermart, Bharti Airtel, ICICI Bank, and Mahindra & Mahindra.

From midcap space, the agency has suggested Ashok Leyland, Chambal Fertilisers & Chemicals, and Federal Bank.

In the smallcap sector, it has recommended Jubilant Ingrevia, VIP Industries, and Westlife Development.

Kotak Securities

For Samvat 2079, analysts at Kotak Securities have identified 8 potential stocks which are expected to do well going ahead. The list includes Aegis Logistics, Axis Bank, Cipla, DLF, Infosys, M&M, Reliance Industries, and SRF.

SBI Securities

The brokerage house has recommended HDFC Bank, ITC, Bank of Baroda, United Spirits, Sumitomo Chemical India, Whirlpool of India, and Mold-Tek Packaging as its top pick for Samvat 2079.

Yes Securities

The top stocks suggested by the analysts at Yes Securities are Shree Cement, Greenply Industries, ICICI Prudential Life Insurance, Prestige Estates Projects, V‐Guard Industries, SBI, and HCL Technologies.

Anand Rathi

The brokerage house has recommended 8 stocks for this Diwali, based upon its technical and derivative parameters, considering the overall momentum in the market. The list includes Arvind Fashions, Computer Age Management Services, Deepak Nitrite, Easy Trip Planners, Federal Bank, Godrej Properties, Max Healthcare Inst, and Zydus Lifesciences.

Stocks to buy in Diwali

Muhurat trading: Top stocks to buy this Diwali