Year-Ender 2022: Hits and Misses – Sensex, Nifty50 gain marginally despite multiple headwinds this year – know what experts say

Year-Ender 2022, BSE Sensex, NSE Nifty50: The year 2022 has been more of misses than a hit, several analysts believe while citing multiple factors that dragged the economy as well as the equity markets this year. Despite negative triggers, the benchmark indices – BSE Sensex and NSE Nifty50 – have reported marginal growth year-to-date (YTD) each surging around 5 per cent as of December 12, 2022, led by bank and financial stocks.

As we approach the end of the calendar year 2022, the macro situation of India has been improving with the return of foreign institutional investors in mid-October till today and softening of crude oil prices, which fell around $75 per barrel after touching a life-high of $125 per barrel earlier this year.

Here are the views we have collated from different experts on the Hits and Misses of 2022:

Expert: Sunil Damania, Chief investment officer, MarketsMojo

2022 has been marked by more misses than hits. Firstly, there was inflation, which we thought would be transitory but proved to be persistent. Then came the Russia-Ukraine war, crude oil price increase that pushed inflation, the RBI raising interest rates among others.

In the second half of 2022, the situation began to improve and as we wind up 2022, the fear of dominating market sentiments has begun to fade. But looking back, it has been a year of more misses than hits.

Even globally, equity as an asset class significantly underperformed. Very few indices were in the green, including India, clearly showing how 2022 was not a good year for equity investors.

Expert: Apurva Sheth, Head of Equity Research, Samco Securities

The Biggest hit for the year was the Banks which were in the continuous spotlight, especially in the latter half of the year. Even the PSU (Public Sector Undertaking) banks which are known to be slow movers or rather no-movers witnessed unprecedented buying interest. The segment enjoyed a high double-digit credit growth, lower provisions & a high net profit growth.

The Biggest miss on the other hand was the IT companies which were severely hurt by the global slowdown, continuous rise in attrition rates, and weak margins. The major FMCG companies were resilient and remained true to their name of being defensive stocks. The Auto companies are slowly getting back on track as the problems of chip shortage & low two-wheelers demand are subsiding.

Expert: Rahul Sharma, Research Head, Equity 99

Despite global uncertainty, boiling crude oil prices, covid pandemic, Indian markets give handful of returns in 2022 supported by good economic performance and govt initiatives.

However, in the present scenario, robust quarter earnings have changed to a large extent due to the enormous growth that the economy has witnessed supporting the markets. In all Nifty and Sensex have performed very well when compared to other global indices.

Expert: Dr. Poonam Tandon, Chief Investment Officer at IndiaFirst Life Insurance

We witnessed a lot of issues in 2022 going on around the world such as geopolitical uncertainty due to the Russia -Ukraine war in February and subsequent high crude oil prices and supply-side issues for food grains which also kept inflation at elevated levels across the world.

Besides, aggressive monetary policy tightening by major Central Banks, slower growth in developed economies kept the markets volatile across the world.

Moreover, the rally so far in 2022 has been narrow with participation from select sectors – Banking, Capital Goods, Auto, Energy, and Metals being the top-performing sectors in 2022 while Consumer Durables, Pharma, Realty, and IT underperforming.

Expert: Shikha Mehta, Research Analyst, Equitree Capital Advisors

2022 was a year of flux with the Russia-Ukraine crisis, fears of recession the world over, hawkish federal banks, supply chain issues, and stringent Chinese policies. Amidst that, the Indian Indices have remained sturdy and shown resilience.

As investors moved to ‘safer’ large caps and with foreign capital finding its way back to India Inc, the headline indices have touched all-time highs. Despite the stellar performance at the index level, small and midcaps have underperformed the Nifty for almost 16 months now, with two-thirds of the small and mid-cap companies being anywhere from 20-75 per cent lower than their peaks.

Expert: Sumit Chanda, Founder & CEO, JARVIS Invest

Given the global headwinds that the markets faced, believe they are in an amazing position and do not see any misses, only hits. This was a very good year for an investor to buy stocks with a long-term horizon. The resilience shown by our markets, and our economy remains unmatched in our peer group.

Maybe, we have started decoupling, or maybe our contribution to global trade and our external debt have not been significant enough to hurt us. But our central bank has been fighting the same battle as everyone else across the globe.

It is the grit, perseverance, and lessons learned from Covid that have held corporates in good stead, and it is reflected in their results. Similarly, GST (Goods and Service Tax) collections have been going up and so is the PMI levels. I can only see an upward trajectory from here. It might not be smooth sailing, but we are still better off than rest of the world.