Football fans will remember 2022 as a year when Lionel Messi took home the World Cup in a memorable final, adding another feather in his illustrious cap. But the yearend also brought news that Pele, one of football’s greats, had left the field forever. Football fans who have grown up watching or hearing Pele’s fascinating success story will be left with mixed feelings. In some ways, investors and traders in India too will be nursing similar feelings about the year.
Conventional wisdom was turned on its head. For instance, events that could have caused a bear market in earlier times did not. The US Fed set the tone for the year, by announcing the end of quantitative easing and very low interest rates. Global markets, including India, reacted negatively to rising bond yields. Indian markets saw record outflows by foreign investors with the rupee touching new lows. But even then, domestic investors kept the faith and it was strong domestic inflows that prevented Indian equities from joining a race to the bottom.
Although benchmark indices have posted a mere 3 percent gain in 2022 India’s equity markets still rank among the best-performing markets globally. The S&P 500 has declined by around 20 percent in 2022. In dollar terms, however, the Indian market fell by seven percent.