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Samvat 2078 is likely to end with a two percent decline for the Indian markets, and that’s a good thing. A look at global markets would give us an idea of how strong the Indian market is. Samvat 2078 was a tough year in many respects for the world market.
The Indian markets started the year on a strong base. Samvat 2077 saw decade-high gains of 38 percent in the Sensex and 40 percent in the Nifty. Two back-to-back strong returns when the world is falling apart is a tall task.
Indian market returns are resilient despite the fact that we saw record fund withdrawals by foreign investors. Indian investors bringing in record funds to the market helped the broad indices close flat.
Quantitative tightening, the Russia-Ukraine war, rising energy prices, inflation, a strong dollar and rising interest rates during Samvat 2078 made it one of the worst years in terms of the global environment for equity markets. A $20 trillion stimulus during COVID created inflationary pressures that refused to abate. Amid such headwinds, the country posting flat returns is a strong performance by any standards.
There were sparks of strong performance despite the overall gloom. Stocks like Adani Power, Adani Total Gas, Adani Enterprises, Bharat Dynamics and Mazagaon Dock Shipbuilders doubled during Samvat 2078.
Nifty heavyweights ITC and Mahindra & Mahindra posted returns of 54 percent and 48 percent, respectively. Around 207 scrips beat the index during the Samvat year, of which 143 stocks gained over 10 percent.
The big question is, what about Samvat 2079?
The headwinds that were present in Samvat 2078 are getting strong in Samvat 2079. The Russia-Ukraine war is getting more intense, threatening a global energy and food crisis. Europe is crumbling with financial and political crises brewing all over the continent. This winter is likely to be a hard one in the continent with many countries and their citizens finding it difficult to pay for their heating fuel.
The US is facing a mid-term election and is more likely to go into recession in the coming Samvat year. China, despite its weak economy, is breathing down Taiwan’s neck.
During these dark times, India is among the few relatively strong countries. The country has its problem of inflation and rising interest rates, but it still has robust growth in comparison to other countries.
For the equity markets, it may be a tough year as the US dollar grows stronger and the US bond yield keeps on attracting money away from riskier assets. The second round of selling is expected anytime during Samvat 2079, especially in global markets, as economic data continue to be muted. Indian markets will join the global fall though it may not be as bad as we may see in the world market.
Samvat 2079 will be a year to remember for a long time as we are heading into a perfect storm. Investing insights from our research team
Weekly Tactical Pick: This jewellery stock has a definite sparkle around it, and how!
Axis Bank’s Q2 FY23 rings in early Diwali, rerating ahead
Asian Paints | Capex plan in the spotlight amid impressive Q2 earnings
Bajaj Finance’s Q2FY23 earnings confirm the strong has become stronger
Rallis India: Will the stock rally in the long run?
Shemaroo: Q2 takes on shine, but full recovery to take time
Navin Fluorine: Pick-up in demand from pharma innovators a key watch
What else are we reading?
Fresh tips to make India a hotter FDI destination
What the US has done to China today, China could do to India tomorrow
DIIs to the rescue as FIIs turn their backs - Déjà vu?
The tricky business of sporting sponsorships
Congress has taken one step forward, but many more remain
Release of lock-in shares not the only headwind for Nykaa
Bajaj Auto: Fine tuning product strategy to sustain profitability
Personal Finance | How to entrust smooth transfer of assets across generations
Joe Biden goes it alone in his trade assault on China (republished from the FT)
New COVID variants have arrived. How worried should you be?
Treat Indian Rupee’s exchange rate as a policy tool to enhance competitiveness of domestic market
India is seizing the moment with a novel approach to diplomacy
CPC Party Congress | Threat of a young and disillusioned China
India is recalibrating its approach to Europe
Technical Picks: HCL Tech, Reliance Industries, Canara Bank, Hindustan Unilever and Copper (These are published every trading day before markets open and can be read on the app).
Shishir Asthana Moneycontrol Pro
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