Samvat 2079 now looks much brighter and more promising and the Indian economy stands in a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy, said domestic brokerage and research firm Axis Securities in a note while sharing its Diwali Muhurat picks.

The brokerage house believes that the relative outperformance of the Indian market will likely sustain in Samvat 2079 as well and would be led by favourable macroeconomic factors and better-than-historical fundamentals of Indian corporates.

Based on these themes, top Diwali stock picks are ITC with a target price of ₹380, Ashok Leyland (TP: ₹175), Polycab India (TP: ₹2,860), Sundaram Finance (TP: ₹2,490), Indian Hotels Company (TP: ₹375), IDFC First bank (TP: ₹70), Westlife development (TP: ₹870), NOCIL (TP: ₹300) and Aptus Value Housing Finance (TP: ₹350).

While inflation continues to be a major challenge in the developed world, inflation in the domestic economy seems to be manageable. Good monsoon, higher reservoir levels, cool-off in commodity prices, and healthy job/labour market cumulatively indicate that the domestic economy would accommodate the prevailing inflation rather smoothly. The majority of the high-frequency indicators are trending upwards and the uptick from the pre-Covid levels is visible, indicating the resilience of the Indian economy,” the note stated.

Since last Diwali, the Indian market has outperformed other global and emerging markets by a notable margin, thanks to the country’s robust economic outlook despite multiple headwinds such as volatile macroeconomic developments, faster regime changes, and volatile FII flows.

Since Diwali, the benchmark index Nifty is down by only 5% (till 11th October 2022) while the S&P500 and the emerging market index are down by a whopping 22% and 29% respectively over the same period.

Indian investors have indeed shown a good deal of maturity in the last one year, a pivotal reason for not witnessing adverse panic reactions (such as the steep market correction in 2008 due to continuous FII selling),” said Axis Securities.