Year-end 2022: Despite several headwinds both globally and domestically, Indian stock markets showed resilience and turned out to be one of the best performers globally vis-à-vis peers, reporting marginally higher returns in the year 2022.
The benchmark indices, Nifty50 and BSE Sensex, each recorded a gain of over 5.5 per cent year-to-date till December 13, 2022. On the other hand, the mid and small market cap indices They generally recorded returns of around 3 and flat, respectively. , in 2022 so far.
The sluggishness of the markets was due to multiple factors: rampant inflation, which remains outside the target range of most central banks, sharp rate hikes, slowing consumption, pressures on raw materials and the end of quantitative easing, Sameer Kaul, MD & CEO, TrustPlutus Wealth. he said in his commentary on market performance in 2022.
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Additionally, the year witnessed the Russia-Ukraine crisis, which resulted in the highest inflation ever recorded in 40 years in major economies such as the US and the UK, said Apurva Sheth, head of equity research at Samco Securities, citing the headwinds facing stock markets around the world. everyone was affected.
He added that this was followed by a sharper increase in interest rates by the US Federal Reserve, which caused capital flight from riskier assets.
Compared to Indian markets, global markets like the Nasdaq fell 30 percent, the Hang Seng corrected 19 percent and the FTSE rose just 2 percent, said Sumit Chanda, founder and CEO of JARVIS Invest, and added: “We have done much better than our peers.”
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At the sectoral level, PSUs recovered strongly, which was a positive surprise for the market in 2022, said Sunil Damania, chief investment officer at MarketsMojo. Similarly, the automobile sector also made a smart comeback with easing chip shortages and weakening industrial metal prices providing relief to the sector, he added.
Consumer goods companies have also had a good run, despite headwinds in input costs, the analyst said, adding that although the rural market saw a slowdown, FMCG managed to maintain its revenues through increases. of calibrated prices or weight reduction.
Among all, information and technology (IT) underperformed due to higher attrition rate and higher salaries impacting margins, among others, Damania said. In addition, the reopening of offices generated an increase in general expenses that affect the sector, he added.
Finally, the pharmaceutical sector was expected to perform well, but it did not meet investors’ expectations and significantly underperformed, Damani noted.
Similarly, Amar Ambani, Group Chairman and Head of Institutional Equities at YES Securities, opined that Bank Nifty was the star performer of 2022 with PSU banks leading from the front as India witnesses one of the credit cycles sweeter and PSU banks were available at very lucrative valuations.
Energy-intensive sectors such as cement and steel faced the brunt of high energy prices and supply chain crises in the wake of the Russia-Ukraine war, Ambani added in his comment.