Bumper returns is the call! How can investors make money in Samvat 2083 after a year of stagnation?

After a bruising year marked by heavy foreign investor selling, elevated crude oil prices and geopolitical tensions, Indian equities staged a sharp comeback just ahead of Diwali. The Nifty’s strong rebound and the return of foreign institutional investors have revived hopes that Samvat 2083 could finally deliver better returns for Dalal Street.

The Nifty surged 9% in the week leading up to Diwali, reclaiming the 25,000 mark and extending its winning streak to seven consecutive sessions. The rally was supported by easing crude oil prices, improving corporate earnings and renewed foreign investor buying.

However, during Sunday’s special Muhurat Trading session, Sensex and Nifty gave up their early gains to close in the red. This marked the first time in nine years that the benchmark indices ended the special Diwali session with losses.

Both indices opened higher during the one-hour session but slipped into negative territory towards the close, ending near the day’s lows. The Sensex fell around 29 points to close at 80,999, while the Nifty 50 shed 44 points to settle at 24,986.

During the year, the market correction was driven largely by the US-Iran conflict, which pushed crude oil prices above $100 a barrel, weakened the rupee and raised concerns about inflation, corporate profitability and India’s import bill.

Foreign investors also withdrew billions of dollars from Indian equities as rising global bond yields and uncertainty over the Middle East conflict prompted them to reduce their exposure to emerging markets.

The pressure intensified in the second half of 2026, when the Nifty fell sharply and several mid and small-cap stocks lost substantial value.However, sentiment changed dramatically in the days leading up to Diwali. FPIs bought Indian equities worth nearly Rs 45,970 crore over five sessions, reversing months of selling and helping fuel one of the market’s strongest rallies in years.

Also Read: Market may deliver bumper returns by next Diwali as valuations and earnings align, says Raamdeo Agrawal

The turnaround came as crude prices fell, the dollar weakened and global investors reassessed their exposure to expensive artificial intelligence-related stocks.

Raamdeo Agrawal, chairman and co-founder of Motilal Oswal, believes the combination of improving earnings and more reasonable valuations could set the stage for stronger returns. “After two years of stagnation, the market has the potential to give investors bumper returns by next Diwali,” Agrawal said in his Muhurat trading message.

He expects lower oil prices, currency stability, returning foreign investment and broad-based corporate earnings growth to support the market during Samvat 2083.

The recent recovery has also been supported by a stronger September-quarter earnings season. According to Chockalingam Narayanan of ICICI Pru AMC, the 35 Nifty companies that had reported results delivered aggregate revenue growth of 22%, EBITDA growth of 17% and profit growth of 22% year-on-year.

The improvement has raised hopes that corporate earnings could provide the foundation for a sustained market recovery after two years of weak returns.

Vinod Nair, head of research at Geojit Investments, said the market’s sharp rebound reflected improving global conditions and renewed investor confidence. “Dalal Street lit up ahead of Diwali,” Nair said, noting that the Nifty had reclaimed 25,000 following seven consecutive sessions of gains.

However, the sustainability of the recovery will depend on whether foreign buying continues and global risks ease further.

Also Read | Analysts see Nifty climbing to 25,600, recommend buying on dips

The return of overseas investors has been one of the most significant changes in market sentiment. VK Vijayakumar, chief investment strategist at Geojit Investments, attributed the rally partly to foreign investors shifting away from global AI-related stocks towards Indian equities.

“The AI sell-off has made India, which is widely regarded as a non-AI trade, attractive for FPIs,” Vijayakumar said.

He also pointed to improving earnings and relatively attractive largecap valuations as factors supporting foreign investment.

The recent correction has made Indian equities more reasonably valued than they were a year ago, when concerns about expensive stocks had discouraged overseas participation. Rupen Rajguru, head of equity investments and strategy at Julius Baer India, expects stronger returns during the new Samvat.

“Post lacklustre returns in the past two years, we expect Indian equities to deliver stronger returns in the upcoming Samvat,” Rajguru said. He believes the Nifty and Sensex could reclaim their previous record highs by Diwali 2027, supported by earnings growth, domestic liquidity and improving economic conditions.

Recovery may remain uneven
The recent rally has been concentrated largely in banking, technology, telecom and other large-cap stocks, while several smaller companies have struggled to participate. Nitin Bhasin and Bharat Arora of Ambit Capital remain cautious about midcap and smallcap valuations, favouring larger companies with stronger earnings visibility.

They believe elevated input costs and slowing growth could continue to weigh on corporate profitability, making stock selection particularly important. Their preference for banks reflects improving credit growth, healthier asset quality and reasonable valuations relative to earnings.

The coming months will also test whether falling crude prices can be sustained and whether corporate earnings continue to improve. A renewed escalation in the Middle East conflict, higher energy prices or a reversal in foreign flows could undermine the recovery.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here.