On Dhanteras, Indians eye investment in precious metals, realty, stocks for good fortune

The purchase of precious metals such as gold and silver, real estate, electronic items, and automobiles, among others, is specially timed by many on this auspicious day.

Diwali is also considered an auspicious time to invest, and many people choose to invest in gold during this period. Buying gold, a safe haven asset, during this festival is believed to bring good fortune and growth in one''s wealth.

"Beyond the symbolic and cultural significance, the use of gold during Diwali also has practical financial implications. For many, it is an opportunity to invest in an asset that can appreciate over time, providing a sense of financial security," said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart Ltd.

Gold is widely considered a safe-haven asset and a hedge against volatility in financial markets. Gold''s performance has also been particularly strong in periods of high inflation

For instance, had you invested in gold during Diwali 2019, by this Diwali, you would have been sitting on 60 per cent returns on your domestic gold investments.

"(Accumulating) gold saves investors'' money from devaluation due to geopolitical tension, economic turmoil, and natural calamities," Yadav noted, stating that the yellow metal is the best asset class to hedge against inflation.

On the Multi Commodity Exchange of India (MCX), where gold is traded, its prices may move from Rs 64,000 to Rs 66.000 per ten grams in the year 2024. The gold prices have crucial support at Rs 56,000 on the lower side. On Thursday, the spot gold traded at Rs 6,010 per 10, data available with India Bullion & Jewellers Association Ltd showed.

Silver prices may also may move upward and may Rs 78,000 to Rs 80,000 per kg levels in the upcoming year. Currently, it is trading at around Rs 71,000 in the Indian spot markets.

"During his speech yesterday, Federal Reserve Chair Jerome Powell said that the US central bank will continue to move carefully but won''t hesitate to tighten policy further if needed to contain inflation. Gains in Gold prices might be capped amid a lack of fresh triggers," said Ravindra V Rao of Kotak Securities.

Further, according to ICRA Analytics, there is a growing appetite for investing in gold ETFs (exchange-traded funds), which are not only considered to be safe investments governed by tight regulations, but some of these ETFs have been generating one-year returns of more than 22 per cent.

"Gold ETFs are comparatively safer as they are governed by tight regulations and are traded on exchanges on a real-time basis. Moreover, the price of gold and its returns in an ETF is the same as physical gold and the cost of buying a gold ETF is lower as compared to buying the yellow metal," Ashwini Kumar said, highlighting the reasons behind growing investor interest in investing in gold ETFs.

Historical data showed that gold has offered attractive returns during India''s monetary tightening cycles. In five rate-hiking cycles since 2004, gold in Indian rupees averaged an annualised return of 19.5 per cent, outperforming other major assets.

For instance, over the past four decades, gold has delivered an average annual return of 10 per cent in rupees, clearly outperforming retail inflation, which grew by an average of 7.3 per cent over the same period.

"The ensuing wedding season will be another trigger for consumers to consider buying gold around Diwali. The strong case for gold among professional investors to mitigate portfolio risk is also very positive for gold demand at this time," said Somasundaram PR, Regional CEO, India, World Gold Council.

Dhanteras holds a special place in real estate, as people wish to walk-in in their dream homes during festival.

"The real estate industry is changing quickly in the context of shifting market dynamics. This year, we anticipate an approximate 15-20 per cent increase in bookings based on year-over-year growth. In addition, there have been reports of approximate 20-30 per cent rise in reservations," said Mohit Jajoo, CEO and Director of Shubhashish Homes.

"We expect a year with a renewed focus on sustainability and a rise in demand for eco-friendly properties as we look ahead in the festive season," Jajoo added.

In a report earlier this month, consultant Knight Frank India and realty industry body NAREDCO said the residential market outlook in the current quarter reflects robustness in residential sales and pricing parameters as stakeholders remain confident of an increase in both the segments. The office market outlook, it said, exhibits buoyancy on all key parameters - leasing, supply and rent as the stakeholders remained confident of the performance of this asset class in the next six months.

However, it said there is an expression of concern amongst Indian stakeholders on the impact of global economic deceleration on Indian businesses.

According to real estate consulting firm CBRE, 2023 festive season is set to record highest residential sales in three years. Building on the robust sales performance witnessed throughout the first nine months of 2023, the housing market is primed for further growth with the ongoing festive season. It is anticipated that 2023 festive housing sales are set to break a three-year record, exceeding the 150,000 unit mark.

Like every year, stock brokerages and financial advisory firms have put out their Diwali stock recommendations. They are largely bullish on the Indian market during the Hindu calendar year ''Samvat 2080''.

The US Federal Reserve keeping the key policy rate unchanged for the second straight time at 5.25-5.50 per cent, as was widely expected, has been boosting stocks globally. Now, global crude oil prices will be a key monitorable issue after key oil exporters Saudi Arabia and Russia reportedly confirmed on Sunday they would continue with their additional voluntary oil output cuts until the end of 2023, amid the conflict in West Asia.

A note by Motilal Oswal Financial Services recommended investors focus on themes like financials, consumption, discretionary spending, construction and real estate, and high-growth niche sectors like MFIs, electronic manufacturing, and new-age FinTech stocks.

In a report, MOFSL said it expects financials, especially PSU banks and NBFCs to continue witnessing robust loan growth while expecting their asset quality to remain healthy. Also, valuations are reasonable, especially after their recent underperformance.

Samvat 2080 is set to start with multiple states going into elthe ection in November-December 2023, which would set the stage for general election likely in May 2024. Historically, such a scenario has resulted in a pre-election rally. In the last five consecutive Lok Sabha elections (from 1999 to 2019), Nifty has rallied 10-35 per cent for the six-month run-up until the announcement of election results.

MOFSL believes the overall trend should remain positive in Samvat 2080 and is positive on Indian equities from a mid to long-term perspective, given the favourable domestic environment.

Here are some of the other Indian advisory firms with their stock recommendations:

Noting that the broader market valuations are rich, the brokerage Kotak Securities in a report titled ''Samvat 2080: Fundamental Muhurat Picks'' recently said opportunities arising from market corrections (especially recent ones) can be used to add quality stocks from a long-term investment perspective. (ANI)