Yearender: Markets saw new heights, volatility from multiple headwinds in 2022

Mumbai (Maharashtra), January 1 : As the central banks of many economies raised their key policy rates in order to control the rising inflation in their respective countries, the year 2022 saw the global markets' indices scaling new records as well as witnessing volatility.
Online trading platforms with easy registration and accessibility have spiked the number of investors in the domestic markets. The pattern was that the foreign investors or foreign institutional investors were selling the equities and these stocks were being bought by the domestic retail investors. There is another looming threat of inflation to the markets.
The Reserve Bank of India is also slowly hiking key policy rates to rein in inflation in the country.
Among the highlights of the year, the number of registered investors went up more than 32 per cent year-on-year in 2022.
The phenomenon also highlighted the fact despite the prevalent market volatility due to multiple headwinds including rate hikes, faltering economic growth and geopolitical tensions, the domestic market witnessed a healthy rise in the number of investors in 2022.
The idea of making an investment didn't really happen only in states with metros, the concept also went to other states like Arunachal Pradesh, Assam, Uttar Pradesh, and Bihar, among others.
According to BSE data, Arunachal Pradesh, Bihar, Uttar Pradesh, Assam, Nagaland, Mizoram, Meghalaya, Tripura, Odisha, Madhya Pradesh, Jammu and Kashmir and Himachal Pradesh witnessed a y-o-y rise of 40 per cent in the number of BSE-registered investors in 2022.
During the year, the most famous trader in the country -- Rakesh Jhunjhunwala -- passed away from cardiac arrest on August 14, 2022. One of the famous traders in the country was also known as "India's Warren Buffett" or the "Big Bull of India".
In the next fiscal, experts said that financials, cement and capital goods would make its mark. As information technology (IT), auto and fast-moving consumer goods (FMCG) firm's stocks suffered during the year, there were other stocks from the sectors of sugar, renewable energy, infra and logistics which were gaining and creating a buzz. Stocks pertaining to agriculture and defence sectors had been also rallying during the year.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "Financials, capital goods and cement appear as strong segments for 2023. Since credit growth is currently running at 17.5 per cent, financials, particularly banking will continue to do well. However, since this segment has done well in 2022, the returns will not be as spectacular as in 2022. Capital goods and cement have the potential to outperform." He said this year, it had been a case of dollar appreciation against all other major currencies.
Kotak Securities expects the market to remain largely flat in 2023.
Shrikant Chouhan, head equity research, Kotak Securities, said, "We expect the market to remain flat for 2023. Multiples are unlikely to expand as the market is discounting 19/20 times to (the financial year 2023-24) FY24 EPS (earnings per share), which is expensive compared to the valuations of emerging and developed markets.
He said if there was a two- to three-year outlook, it was advisable to buy at current levels. "However, from a one-year perspective, buying the dip would be a prudent strategy," he said.
"We are bullish on financials, capital goods, construction defence, and auto. Defensives would be FMCG and pharma. Cautious about chemicals, metals, and IT," according to Shrikant Chouhan.
There are also experts who believe investors would get 10-12 per cent on returns in the future.
Mohit Nigam, Fund Manager and Head for portfolio management services (PMS), Hem Securities, "We believe that from here, we can see an upside towards 19,500-20,000 in Nifty and 65,800-67,000 which is around 10-12 per cent return in the respective benchmarks."
He said, "With the corporate earnings season around the corner, cool-off in commodity prices, and the unveiling of the Union Budget FY24, we firmly believe that 2023 will be a better year for investors in terms of returns."
Furthermore, Nigam said it was also the right time to invest some amounts in systematic investment plan (SIPs) for medium-long term investment horizon.
Sumeet Bagaria, Executive Director, Choice Broking, said, "Bond investors are looking for India to be added to global indexes which would boost investors' confidence globally..."
On Nifty by the end of 2023, he said, "The market may witness more consolidation after the successive rise and it would be healthy for the long run. As per the technical parameters, we are expecting a bullish move in the Nifty where the support remains at 16800-15800 while resistance is placed at 19500-21000. While Sensex support remains at 52000 while resistance is placed at 71000."
Resistance is the level at which supply is strong enough to stop the stock from moving higher. Support levels are levels where a declining stock will find bottom and bounce up from.
Inflation has started to ease in the country which indicates that the purchasing power of the people would be increased. When the people's purchasing power increases, it attracts investors in that country. Eventually, it will attract foreign investors to the economy if the purchasing power of the people is lifted.
Experts believe that though the markets will remain flat in the first half of 2023, the second half will see markets gaining with the number of participants involved increasing. By the end of 2023, market conditions are definitely going to be better on returns.