NEW DELHI: In a year jam-packed with uncertainties such as a pandemic that refuses to wane, Russia’s war in Ukraine, soaring inflation, aggressive rate hikes to name a few, India’s equity market showed resilience and managed to close the calendar year with a gain.
BSE Sensex, which fell 293.14 points, or 0.48%, on Friday (December 30) to end 2022 at 60,840.74, gained over 4.4% year-on-year this year after double-digit growth in the previous three years. The broader NSE Nifty index declined 85.70 points, or 0.47%, to end at 18,105.30 on Friday. Still, the 50-share index marked a 4.3% gain for 2022.
If one has to describe the market in 2022 in one word that would be volatility. On 14 occasions, Sensex rallied over 1000 points intraday while it fell 1000 points similar number of times this year. On February 24, when Russia invaded Ukraine, Sensex crashed 2,702 points. While some analysts believe the gains in the Indian market are on the back of continued strong economic momentum, some believe the local market is richly valued.
“Indian markets outperformed most other markets in 2022 benefitting out of better management of macros including inflation management and corporate earnings that didn’t disappoint despite challenging times. This meant India got a larger than proportionate share of FPI funds directed towards emerging markets.
Rising trade deficit and pressure on rupee were viewed negatively,” said Deepak Jasani, head of retail research, HDFC Securities. “In terms of global markets, Brazil, India, Indonesia and Singapore markets rose between 4% and 5% in 2022. Brazil and Indonesia benefitted as these are resource-heavy economies (commodity prices are up through the year though lower than the intra-year highs) and Brazil underwent transition of presidency. Nasdaq, China, Hongkong and German markets performed the worst even as the tech sector came under constant pressure, China witnessed slowdown in growth and recurrence of Covid and German markets suffered from energy crisis due to Russia Ukraine conflict,” he added.
Japanese index Nikkei fell 11%, Dow Jones 9%, Hang Seng 16%, S&P 500 20% and NASDAQ composite - the worst performing index - plaunged 34% in 2022. Within the Indian market, share prices of PSU Banks gained more than others. The PSU Banks index saw a rally of 72%, followed by Nifty Bank up 22%, Metals and FMCG, up 23% and 19% respectively.
The Auto and Energy pack grew by 15% and 14% upticks. Pharma and IT indexes, which saw massive rally last year, witnessed correction in 2022. Nifty IT fell about 26%, Realty and Pharma fell 11% wrack while Media was down 9%. Stock wise, Adani Group flagship Adani Enteprises was the top 2022 gainer with a rally of 125% YTD. FMCG major ITC, which was stagnated for years, gave a return of52% in 2022.
