Santa's on his way! Here's what to expect from Dalal Street going ahead

The first day of the week saw a disastrous start as the 30-share index plummeted over 1,600 points on December 20, tracking losses across the board as concerns over rising Omicron cases spooked investors.
 
However, Dalal Street saw a strong recovery from the crash as the benchmark indices closed higher for the third consecutive session on Thursday.
 
Taking a look back at history during the Santa season, Sreeram Ramdas, Analyst, Green Portfolio said that the last five days of December and the first two days of January, Santa visited Dalal street 17 times in the last 20 years. This underlines how the bulls have overwhelmed the bears during this period.
 
"Nonetheless, the past few weeks have certainly been more volatile than usual. Given the uncertainties evolving from the Omicron variant and the path of interest rates, the markets continue to be indecisive and we believe all surprises have been unboxed and the bulls are well-positioned to stage a buying climax and extend it onto next year," he added.
 
"Specifically, on Dalal street, the offtake of the PLI scheme and the momentum we are seeing with exporters gaining a foothold in the international markets, we see immense value in certain pockets of the markets. Having said that we see a minor correction in the overall market as the shift by the RBI in its accommodative policy takes place," Ramdas further added.
 
"While it’s impossible to catch the bottom, we feel investors with mid to long-term horizon should take the correction as an opportunity to accumulate fundamentally good stocks as per one’s risk appetite," Rajesh Agarwal, Head of Research, AUM Capital Market, told BusinessToday.in.
 
"There are short term concerns regarding Omicron, any restrictions imposed might be a problem in the short run but the real concern remains “inflation” not only domestically but in many major economies across the world. We have seen US inflation hitting highest level for nearly 40 years," he added.
 
Talking about the specific themes and stocks, he noted that one needs to be very selective about the quality of the stocks going forward and have a longer time horizon.
 
"Apart from large-cap stocks like Reliance, ITC, SBI we are bullish on Auto Ancillary space and recommend stocks like LG Balakrishnan, & Sona BLW Precision. Besides BSE Ltd, IRCTC, Century Textiles, Philips Carbon are some of the midcap names that look good on valuations," he said.
 
According to Sonam Srivastava, Founder, Wright Research, the bears have been in control of the market beyond doubt since October. But the market showed a minor rebound last week, and we have to wait and see if the trend strengthens.
 
"However, historically, if you look at the Nifty returns over the past 14 years, 11 times the index has turned positive in the last two weeks of the year, so the uptrend could probably hold," she added.
 
She noted that the reasons that could give wings to the rally are the weakening of the dollar index (which has been on a high since October), India getting back FII attention (as it is almost in an undervalued zone after the sell-off), and the remarkable growth that India’s economy is showing.
 
Srivastava further added that the worry of the Omicron variant is lingering in India, but the industry has become relatively more robust to covid waves.

Manoj Dalmia, Founder and Director, Proficient Equities Limited noted that there is no good time to buy stocks. If markets could have been timed then everybody would have been rich. Focussing on quality stocks with strong fundamentals when it is undervalued is the best time to buy.