THE year 2022 will be remembered as a watershed year for Indian markets. The year began with geopolitical tumult that sent commodity prices spiralling and threw major global economies into a tailspin. Big Tech melted down from sky-high valuations and cryptos fell like a pack of cards. Amidst the turmoil, the Indian economy wrestled with the bugbear of inflation and remained resilient. Not just that, our equity markets displayed strength despite erratic FII flows, with domestic investors pulling their weight and showing faith in their country’s future. And now, as we head into 2023, investors are justifiably wondering where things are headed in the new year and what they should be doing with their portfolios. Here are some things to keep in mind.
First, we have the Fed funds rate. After four consecutive rate hikes of 75 basis points till November, the Fed raised rates by 50 basis points in December. The central bank has now suggested that it will consider the lag effect of large rate hikes delivered in the past few months and moderate future rate hikes. This augurs well for Indian markets as we may well see FPI flows picking up pace in 2023.
Tailwinds Galore
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