Dear Reader,
The markets may not be in full bloom, but the festive glow is unmistakable as Diwali and Samvat 2082 approach. It’s time to wish good riddance to Samvat 2081, a year the Indian markets would dearly love to forget. It’s a year in which we faced the brunt of Trump’s tariffs, conflict with Pakistan, relentless selling by foreign investors, cutbacks to corporate earnings, a wobbly rupee, and a scare for our much-vaunted tech firms. But Diwali is a time for new beginnings and the worst seems to be behind us as we step into the new Samvat year.
Let us count our blessings. Retail inflation has fallen to an eight-year low, which, together with the GST cuts, should finally nudge the urban consumer to start spending. The monsoon has been good. Food prices are in deflation, and the minutes of the last meeting of the Monetary Policy Committee indicate that a rate cut is almost certain at the next meeting in December. Foreign portfolio investors have turned net buyers, albeit marginally. The latest trade data show that not only is India weathering punishing tariffs with aplomb, but also that domestic demand is in fine fettle. And with double-digit profit growth on the horizon, India’s equity story looks poised for a stronger turn.
But the gains aren’t just macro. The Street is seeing green shoots in corporate earnings too. Many stocks now have undemanding valuations, such as Axis Bank, which declared its Q2 results this week.
The reaction to ICICI Lombard’s muted numbers was telling: the stock rose, not because of what was reported, but because the rationalisation of GST rates, which came into effect on September 22, 2025, is expected to provide a significant boost to the non-life insurance sector. Our weekly tactical pick rides on both bullish rural consumer sentiment and the attraction of gold as an asset class. Much of the jump in the markets has happened in the FMCG and consumer durable segments. Nestle, for instance, is richly valued, but that may sustain on the expectation of consistent growth. In the consumer durables sector, LG Electronics didn’t disappoint as the most awaited debut of the season—we wrote here about what is likely to happen, post-listing. Even in metals, Trump’s tariffs are having a limited impact on steel demand.
We analysed the prospects of the MidWest IPO and considered the road ahead for HDB Financial. We asked what sets Canara Robeco AMC apart from other listed mutual fund houses.
Of course, that doesn't mean that everything is hunky-dory. The US-China trade war has escalated, with China imposing restrictions on its exports of rare earths, which it dominates, and Trump retaliating by threatening to impose 100 percent tariffs on imports from China. Markets are hoping all this is just the prelude to a deal. Nevertheless, as our columnist Vivek Kelkar points out, this escalation poses major risks to the world economy.
Talking of the world economy, the IMF has been surprised by its relatively decent performance despite the uncertainty unleashed by Trump’s tariffs. The IMF warns, however, that as the temporary boost from front-running tariffs fades, the underlying economic strains are likely to surface and for the markets, the “ground is shifting beneath this seemingly tranquil surface”.
In the US market, the IMF has pointed out that the concentration risk on account of the Magnificent 7 tech stocks is now higher than during the dotcom bubble. This FT story, free to read for Moneycontrol Pro subscribers, says, “It turns out that applying AI at work is a lot more complicated than initially expected”, which ties in with scepticism about whether the huge investments in AI will pay off. And this article wonders whether Tesla’s market value of $1.4 trillion, 10 times that of BYD, can be sustained. The troubles of some US lenders — JPMorgan’s Jamie Dimon called them cockroaches — are another source of concern, although this FT piece says, “there will be more cockroach sightings, but termites don’t appear to have chewed through the foundation”. It doesn’t help that the Buffett Indicator, that blunt instrument of market excess, is now at an all-time high in the US.
It's no surprise, therefore, that Indian firms that depend on foreign revenues, especially US revenues, are facing headwinds. We analysed the outlook for Wipro, Infosys, Mphasis and HCL Tech this week — They may be in the same IT services space, but their prospects are not the same.
So, where does that leave us? RBI Governor Sanjay Malhotra summed it up succinctly when he said, “Even though growth is strong by current reckoning, its outlook is softer and is expected to be below our aspirations.” If you are wondering how to navigate such a market, look no further than these 20 stocks to light up Samvat 2082, handpicked by our independent research team.
On the one hand, we have a domestic macro setup that’s the best it’s been in years. On the other, we have a US market that’s increasingly unhinged from fundamentals. And a global landscape wracked by trade and geopolitical earthquakes. In this world starved of predictability, even stability can deliver outsized returns.
And maybe that’s the real mood of Samvat 2082 — not exuberant, not euphoric, but resilient. As Katy Perry put it in ‘Rise’, her battle cry of a song:
“I won't just survive
Oh, you will see me thrive
Can't write my story
I'm beyond the archetype.”
That might well describe this market. Not exploding with euphoria — but refusing to go down, clawing back gains quarter by quarter, sector by sector. No fireworks, just persistence. No clear skies, but a will to rise.
Wishing you a happy and prosperous Diwali.
Cheers,
Manas Chakravarty
In case you missed them, here are some of the other stories and insights we published this week, apart from our technical picks in the equity, commodity, and forex markets:
Stocks
Suraksha Diagnostics, Tata Motors demerger: Which entity offers a better ride for investors? GM Breweries, D-Mart
Markets
Silver ETFs – The road ahead for investors
Mutual funds trim cash marginally in September; caution persists amid market swings
Financial Times
How long will gold mania last?
Companies & sectors
WPI linking factor to take a toll on road asset returns
Earnings downgrades loom large over chemical companies
For India's booming datacentre industry, the new electricity bill can address a key challenge
LIC struggles to find growth as its investors grapple with low returns
Potential Emirates NBD-RBL deal reveals foreign banks' new India playbook
Economy & Policy
Data Story: Trump’s Tariffs and Indian Jobs: What the latest PLFS data reveal
Power Reforms — If there’s political will, there’s a Bill
Nuclear Power — From margins to mainstream in India’s energy mix
Trade tips for India amid weak WTO forecast
Can RBI’s UMI pitch become a game changer?
Geopolitics & Geoeconomics
The Eastern Window | China's 15th five-year plan: Navigating growth amid global challenges
Can the world break China’s dominance over rare earths?
Navigating New Waters: The impact of port fees on global trade politics
Tech & Startups
Google puts India on its AI map
Startup Street: Can India’s home-grown technology alternatives enter the big league?
TCS says only 500 workers on new H-1B visas as it moves to reduce US dependency
Others
The message from this year’s Economics Nobel: Ideas drive development
GuruSpeak: Nimai Jhunjhunwala’s search for a forex hedge turned him into a quant trader
The new NPS rules add flexibility, but may also leave investors confused
Personal Finance | Don’t let money issues lead to a divorce
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