Sensex Likely To Touch 36,000 By Next Diwali

Before I talk on the markets and what lies in it for us in the coming year, I take this opportunity to wish you all dear readers a Happy Diwali and indeed wish you all a Happy and Prosperous Year ahead. 

I can say with a lot of confidence that equity investors will be a lot more richer by Diwali next year than this one as the Sensex in my view will deliver 18 to 20 per cent returns over one year. Indian economy has slowed down, but it is sound and continues to remain the fastest growing economy in the world. The very bullish expectation on the economy's revival and the reforms undertaken by the current government is what is keeping the forward-looking equity markets excited. 

Any correction in the current market scenario is like getting an opportunity to buy branded goods at attractive discounts. Let us not worry about correction and instead, invest our energy and time on identifying the out performers. Trust me, there are very many stocks available in the markets even at this juncture that can provide extraordinary returns over the years. Even if there is a correction in the market, I expect a V-shaped recovery. 

The abundant liquidity with improving global economic situation is simply too good to resist for long-term equity investors. The kind of participation we are seeing from equity investors in IPOs speaks volumes about the underlying positive sentiments among investors in India. 

In our cover story this issue, we have shared our market outlook and also shared some interesting market statistics. Almost 188 stocks more than doubled in the last one year even as more than 300 stocks delivered returns in excess of 25 per cent in one year. Such was the strength in the markets. One had to simply hold on to a dozen stocks from the large basket of outperforming stocks to smile your way to the bank. 

For those who have missed last year's rally, do not be disappointed as we have come up with another set of top 7 stocks that are our top Diwali picks. Go ahead and create a new portfolio without any reservations as equity yet again is expected to outperform the other asset classes. 

In our special report, we have provided our commodity market outlook as we believe the synchronous economic growth globally is expected to push commodity prices higher. 

There are multiple factors working in favour of equity markets. One of the most important factor aiding the higher valuations in equities is the lower interest rate environment globally. In India, expect some steady earnings upgrade couple of quarters down the line. Indian market will continue to enjoy a growth premium and may consistently trade above its long-term averages. Rich valuations should not be a major concern here for long-term investors. 

Sensex should, in my mind, touch at least 36,000 by next Diwali, while the lower limit for Sensex could be 31,000, unless some catastrophic event breaks out.

Invest regularly, invest in tranches and do not indulge in leverage trading. We will always be there to support you with guidance on the markets and identifying growth-oriented investing ideas for you. 

Once again, I wish you a Happy and Prosperous Diwali!.