India shines as stock market clutches 2nd place

The Indian stock market performed quite well in 2022, when all major indices fared badly due to the Russia-Ukraine war, rising inflation and interest rates, and the resurgence of Covid fears in China, Indian news outlet Financial Express has reported.

In local currency terms, the Sensex increased 4.44% in 2022, ranking second worldwide.

Brazil has been the top performer of the year, with returns of 4.69%.

In Asia, the Sensex index topped the Jakarta Composite Index and the Strait Times, both of which gained 4.09%, adds the Financial Express report.

The wealth of investors increased by 6.15%, or Rs16.36 trillion.

Meanwhile, it was down 4.53% in dollar terms (the index was down 5.92% in dollar terms) as the rupee fell 10.18% against the dollar in 2022, the highest since 2013.

Except for Singapore's Strait Times and Brazil's Bovespa, which provided dollar-based returns of 10.13% and 4.68%, respectively, all other major market indices are in the red this calendar year.

Leading global indices such as S&P 500, Hang Seng, Shanghai Composite and DAX were down over 10% in 2022, with S&P 500 falling as much as 19.44%.

Independent market consultant Ambareesh Baliga said: "After a sluggish first half due to rate hikes and global factors, the performance picked up in the second. While India outperformed the rest of the markets, it was disappointing compared to the past two years.

"Stocks that did well in 2020 and 2021 didn't do well in 2022, and vice versa. That is, stocks like PSU banking, which had a rough ride in the past two years, did well."

The rise in the market was aided by the power, bankex and energy indices which jumped 18.51%-27.69% while the IT, healthcare and consumer durable were down 11%-23%.

The top gainers in Sensex were ITC, Mahindra & Mahindra, NTPC, IndusInd and Axis Bank which rose between 38%-60%.

In the Nifty 50, Adani Enterprises was up 125% while Coal India (70%), ITC (60%), Mahindra & Mahindra (51%) and NTPC (41%) were the other top gainers.

During the year, foreign institutional investors sold shares worth Rs1.23 trillion while domestic institutional investors bought equities worth Rs 2.73 trillion.

Going forward, it is anticipated that the first half of the upcoming year may be challenging, but that the second half will be better.

"I see a few headwinds for 2023, primarily around the Covid scare in China, the slowdown in the US and Europe, and the Fed's hawkish stance. The bearish sentiment is bound to affect India too. So, I don't see earnings springing a big surprise. In the second half, there could be a revival and markets will do well. Consequently, earnings will also improve," said Baliga.