Indian markets wrap 2022 on a weak note – Sensex, Nifty50 decline on the last day of the year

• The 30-stock index Sensex closed 0.48% or 293 points lower at 60,840 while the 50-stock index Nifty50 ended 0.47% or 85 points lower on Friday.
• FMCG, bank, IT, auto and pharma indices traded in red while PSU bank, media, metal and realty stocks were gainers.
• While Indian markets closed the last day of the year on a weak note, they still managed to outperform their global peers in the US, Europe and the rest of Asia in 2022.

India’s benchmark indices Sensex and Nifty50 end last of 2022 on a weak note, dragged down by banking and FMCG stocks despite positive cues from global markets.

The 30-stock index Sensex closed 0.48% or 293 points lower at 60,840 while the 50-stock index Nifty50 ended 0.47% or 85 points lower on Friday.

FMCG, bank, IT, auto and pharma indices traded in red while PSU bank, media, metal and realty stocks were gainers. In the Nifty50 index, the top gainers had a mix of financial services, oil & gas, auto and consumer goods companies, while the top losers included heavyweights like ICICI Bank, Bharti Airtel, among others.

Despite the decline in the overall banks index, PSU banks continued to rally, emerging as the top gainer on the bourses on Friday. The index also further cemented its position as the top sectoral performer of 2022, with a gain of 67% this year.

“On the last day of a tumultuous year, domestic indices shed their early gains as negative signals from global peers pushed indices lower. Investors remained concerned over the economic outlook for the new year, underpinned by growing fears of recession. The ongoing volatility is expected to be sustained in the near-term because of high interest rates and a slowing economy,” said Vinod Nair, head of research at Geojit Financial Services.

While Indian markets closed the last day of the year on a weak note, they still managed to outperform their global peers in the US, Europe and the rest of Asia in 2022.

In fact, Indian markets marked the seventh successive year of positive gains.
Source: Morningstar, as on December 30, 2022

What to watch out for in 2023, according to analysts
“2023 would be a year to watch for 4 Cs – CPI globally – are we seeing a trend reversal or just a lull before the storm, China – will the dominance return and how soon , and Currency – will the USD continue to display its indomitable spirit. An overlay of these factors, coupled with geopolitical events could well mean possibility of convergence (4th C) in returns in equities and fixed income as an asset class,” said Lakshmi Iyer, CEO, Investment Advisory, Kotak Investment Advisors.

Earlier on Thursday, markets in the US found comfort in easing jobs data, expecting inflationary pressures to ease going forward. This helped the equity markets snap a two-day losing streak, with the benchmark S&P 500 closing 1.75% up, while the Dow Jones Industrial Average ended 1.05% higher. The tech-heavy Nasdaq saw a boost, too, closing 2.59% in the green, with shares of Tesla jumping over 8% after a spate of declines.

Most of the Asian markets were also in the green on Friday, led by the Shanghai Composite index which gained 0.51%, followed by the Taiwan Weighted index which rose 0.85%. The Hang Seng index gained 0.2%, while Nikkei 225 closed flat.

Crude oil prices softened for the second straight day on an uncertain demand outlook. Brent crude oil prices hovered around $83 per barrel, with a decline of 0.5%. Rupee closed up on the last day of the year at 82.72, appreciating 8 paise against the US dollar.

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