Profit booking in Indian stocks in year's last trading session; benchmarks up 18-19 pc in 2023

New Delhi [India], December 29 : Indian stock indices settled 2023's last active trading session marginally in the red, largely due to profit booking and subdued global cues. Sensex and Nifty settled 0.2 per cent lower each on Friday.
Cumulatively, the past 12 months have been stellar for investors who parked their money in Indian stocks. Though there has been some turbulence, first during the Adani-Hindenburg episode and lately during the initial days of the Israel-Hamas war, the calendar year 2023 gave handsome monetary dividends to stock market investors.
In 2023, Sensex and Nifty gained 18-19 per cent, on a cumulative basis. The iindices had gained 3-4 per cent in 2022.
"The market witnessed mild profit booking on the last trading day of the year...the euphoria is expected to continue during the start of the next year on account of the exuberance of rate cuts and the drop in bond yields," said Vinod Nair, Head of Research at Geojit Financial Services.
"Oil prices, on the other hand, fell by 10 per cent during the year, which could ease inflationary pressure and support the operating performance of the corporates," Nair added.
Firm GDP growth forecasts, inflation at manageable levels, political stability and signs that the central banks world over are done with their monetary policy tightening have painted a bright picture for India, which is the fastest-growing major economy.
The strong inflow of funds from foreign portfolio investors (FPIs) lately has also supported the stocks to march towards all-time highs. Notably, foreign portfolio investors have again trained their sights on India, becoming net buyers in the country's stock market.
Following a cumulative accumulation of Rs 9,001 crore in November, they have again made a beeline to invest in Indian stock markets, with Rs 66,135 crore invested in December, data from the National Securities Depository (NSDL) showed.
The latest inflow comes at a time when India reported strong quarterly growth.
"We may see further consolidation in the index and it would be healthy after the recent surge...Participants should stay focused on the selection of stocks and prefer index majors," said Ajit Mishra, SVP - Technical Research, at Religare Broking Ltd.
The year also has been strong for Initial Public Offerings, with most companies making their debut on the exchanges with a sizable premium.
According to Manoranjan Sharma, Chief Economist at Infomerics Ratings, Indian startups have raised USD 10 billion through IPOs so far this year -- exceeding what was raised in the last three years. More importantly, he noted that the pipeline for future public listings remains robust over the next two years.
"...there is a distinct possibility that 150 private firms could potentially list on the stock market over the next 36 months, adding a whopping USD 400 billion of market value over the next 2-3 years," Sharma contended.
"Zomato could be quickly followed by...Ola, and Flipkart leading to a bull run and the India growth story could, in many ways, parallel the Chinese story of the last decade. Tie your seatbelt and enjoy the ride!" Sharma further added.