As markets prepare to usher in Samvat 2082, sentiment has turned optimistic, with expectations that the rewards of this patience may finally begin to unfold in the new year.
The outgoing Samvat saw Indian equities navigate a period of consolidation that lasted over a year. The Nifty gained 3.9% during the period, while the Midcap index inched up 1.1%. The Smallcap index, however, ended slightly lower, declining 4.6%. Despite modest headline numbers, the broader market witnessed a mix of time correction and select sectoral churn.
Sector performance showed a wide divergence. The IT sector emerged as the weakest link, weighed down by its exposure to the US market, policy uncertainties around H-1B visas, and sluggish growth among large software exporters. The Nifty IT index closed the Samvat year down 18.5%.
In sharp contrast, the defence sector took centre stage, becoming the new investment theme of Samvat 2081. The Nifty Defence index surged about 25% as investors embraced the government’s focus on domestic manufacturing and indigenisation. Market participants largely believe the sector’s growth story has structural backing and is likely to remain in focus in the coming years.
The year also faced multiple headwinds that kept equities range-bound. Geopolitical tensions, including the India-US trade friction and the India-Pakistan conflict, weighed on investor confidence. Global funds were drawn towards the booming AI trade, with India lacking a deep-tech or AI-focused play to attract foreign inflows. Elevated valuations further contributed to bouts of FPI selling, diverting foreign capital to other regional markets.
However, momentum appears to be shifting as the new Samvat approaches. October brought a clear revival in sentiment, with the Nifty rising 4.9%, Midcaps gaining 5%, and Smallcaps up 3.6% month-to-date. The festive season has added to the cheer, and with the market ending Samvat 2081 in green, investors are entering Samvat 2082 with renewed confidence and expectations of stronger gains ahead.
