It is a crucial time of the year. With Diwali 2020 just around the corner, investors reallocate the asset allocation in their portfolio to adjust performance.
Muhurat trading is a special one hour window when the market opens on Diwali. Opening new ledger, worshipping Goddess Laxmi, and making token transactions to usher the new accounting year in an ancient practice observed by Hindus. Borrowing the age-old tradition, Bombay Stock Exchange, the oldest stock exchange in Asia, started muhurat trading in 1957.
During the muhurat session, you will have to trade within a very short time, and hence, you need some preparation in advance. Mostly, traders will buy stocks, which they plan to hold for a long time. It is not a good day for intraday trading. So, in order to trade during muhurat, you need to shortlist the best stocks for muhurat trading.
If you are not sure how to pick the best stocks for muhurat trading, looking at the list suggested by experts is a starting point. Before muhurat trading, experts select stocks and sectors which they think will gain with the swings of the economy. Based on their understanding of market behaviour, historical data, and trend analysis, they make predictions, which you can use as a guidebook.
Let’s now see which are the top 10 stocks that experts picked for the muhurat trading 2020.
Analysts think that banks, financial institutions, automobiles, oil and gas, telecom, capital goods, utilities are the few sectors to remain robust in samvat 2077. The economy driven sectors are going to be at the centre stage, passing over the defensive stocks. As the economy has started to return to normalcy, these sectors will see a boom in the coming months, gaining an upside between 20 and 39 percent.
Now let’s take a look at the list of expert-recommended stocks.
The bank registered a Q2 growth of 20 percent YOY in its operating profit. There is a loan growth of 11 percent in Q2FY21, and cost-to-income ratio improved from FY 20 (42 percent) to 38 percent.
Prediction of robust growth fueled by strong demand is going to keep Bajaj Auto one of the favourites of the investors.
There is a huge surge in demand for motorcycles as people’s interest shifted from travelling in public transport to owning private vehicles due to COVID fear factor. Bajaj Auto reported that the demand for domestic motorcycles has already reached 90 percent of last year’s level. Demand for motorcycle export rose to 90-95 percent of last year’s demand level.
L&T can see a massive upsurge. The company already has a strong prospect pipeline of Rs 6.1 lakh crores; Rs 4.8 lakh crores in the domestic market and Rs 1.3 lakh crores in the international field. When things start to materialise in the next quarter, the growth rate can reach to 86.9 percent.
SBI Life Insurance reported growth in business volume and profit in the Q2 reports. The company registered 0.5 percent YOY and 0.2 percent Q2 QOQ growth in value of new business (VNB). The solvency ratio raised 245 percent in Q2FY21 from 195 percent in Q2FY20. Analysts set the target price for SBI life at Rs 1,100, an upside of 37 percent.
Bharti Airtel has seen a revival in its Indian business. During the last quarter, the company’s consolidated net loss volume came down to Rs 763 crores. Q2 revenue grew to Rs 25,785 crore, clocking 22 percent YOY growth.
Analysts set a target price of Rs 710 for Bharti Airtel stocks.
ITC has a strong portfolio of brands in different FMCG categories. The Indian Tobacco Company witnessed a slight dip in cigarette sell during July and August due to lockdown restrictions, but the demand has picked up again in September.
With its FMCG portfolio tracking well, ITC shares are good for long term investment plans.
There is strong growth prediction for Bajaj Finserv. Bajaj Life registered 19 percent growth in its YOY individual annual premium equivalent (APE). Its pre-overrun value of new business (VNB) margin can rise up to 23 percent in the next two years.
The company stock price may see an upside of 31 percent in the market.
Hindustan Zinc registered 25 percent growth in volume, powered by strong demand in metal. Volumes of zinc, lead, and silver rose by 8, 30, and 51 percent respectively YOY, and revenue grew to Rs 5,660 crores. Zinc price raised by 30 percent since lockdown hit in March. Market revival suggests the company is on a strong path of long term development.
The pharma companies enjoyed a lot of attention since COVID-19 outbreak. Zydus Cadila’s COVID-19 therapy Pegihep has entered phase III trial after completing phase II. The company in a regulatory filing mentioned that it is ready to move to the next phase of the test for its biological therapy of COVID patient. The market demand for company stocks is expected to remain buoyant for Zydus.
The stocks are currently trading at a steep discount of its ten-year’s mean, making it attractive to investors. Ambuja Cement is one of the leading cement manufacturing and builders brands in India. The company is currently working towards increasing its presence in north India along with intensifying on cost-saving projects.
Strong growth visibility, robust balance sheet, and attractive valuation might lead Ambuja Cement stocks to rally.
Best stocks for muhurat trading prediction is based on the current and ongoing performance of the companies. A lot will depend on market recovery as the economy bounces back to normalcy. Possibility of a vaccine by the middle of next year is likely to keep the market in a positive mood.
Analysts, however, warned off investors to instead adopt accumulation strategy while investing in economy driven sectors. These sectors are prone to economic swings, so a gradual investment plan is a better approach for these sectors.
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