STANDING TALL

WHILE THE COUNTRY’S MARKETS HAVE OUTPERFORMED THEIR GLOBAL PEERS, ONLY A HANDFUL OF INVESTORS HAVE MADE MONEY. WILL THE NEXT YEAR BE ANY DIFFERENT?

ROLLER COASTER. LACKLUSTRE. Tough. Resilient. Ask any top stock market analyst and that’s how they will describe the way 2022 has panned out for Indian investors. The fallout of the Russia-Ukraine conflict, geopolitical risks, wild swings in crude oil prices, a depreciating rupee, skyrocketing inflation, successive rate hikes, macroeconomic uncertainty—everything that could perhaps go wrong in a year, went wrong in 2022.

But amid this upheaval, India has relatively outperformed global peers in terms of all economic parameters, including capex spend, discretionary consumption, pickup in banking activity, etc., and this is reflected in the Indian equity markets. While in the US the Nasdaq is down by around 29 per cent and the S&P 500 by about 17 per cent year-to-date (YTD) as of November 18, both the Nifty 50 and the BSE Sensex are up by over 5 per cent. Even in the emerging markets context, the MSCI Emerging Markets index is down 22 per cent, with Chinese equities plunging nearly 15 per cent. But only select Indian investors who were smart enough to pick the right stocks, diversify beyond the index and take risks have made good returns.

So, will 2023 be a year of wealth creation?

With little clarity on the global macro environment, experts are reluctant to call a trend for India’s stock markets in the New Year. But many of them, looking at the markets from the prism of the decoupling theory—which says that different asset classes that typically rise and fall together start moving in opposite directions—believe India will outperform its peers, but are not sure about the extent, given the all-round recessionary fears.