- Date : 05/03/2023
- Read: 3 mins
As both key indices touched their all-time highs in December 2022, banking, energy, FMCG, and pharma stocks performed exceedingly well. However, several IT stocks plummeted in value, and investors should proceed with caution in 2023.
2022 was a breakthrough year as far as India’s stock performance goes. Shares of several companies witnessed a rapid rise in their values as both key indices, Nifty50 and Sensex, touched their all-time highs in December. The primary drivers behind this rally were the shares of banking, oil and gas, energy, pharma, and Fast-Moving Consumer Goods (FMCG) companies.
The five best-performing stocks in India in 2022 include Adani Enterprises (up by 140%), Coal India (up by 54.7%), ITC (up by 54.4%), M&M (up by 52%), and Axis Bank (up by 40%).
However, amid this boom in the Indian stock market, shares of IT companies failed to perform up to their potential. Several IT stocks were among the worst Nifty50 performers in 2022, including Wipro, Tech Mahindra, HCL Technologies, Infosys, and TCS, among others. These stocks plummeted by 12 to 45% in their value as IT companies’ profit margins took a hit, with employees resuming work from the office and their operating costs going up.
Also Read: How To Invest In Stocks Like A Pro
How are Indian IT stocks expected to perform in 2023?
The start of 2023 saw a dip in the indices' value after they soared to their all-time high points in December 2022. As far as IT stocks are concerned, most financial experts recommend investors should proceed with caution while making investment decisions. IT sector stocks are currently experiencing selling pressures, and this trend could continue for the first half of 2023.
But at the same time, experts believe long-term investors can invest in IT stocks proactively. These stocks are currently trading at low prices, and hence, this could be a good time to buy and hold them. However, you should be ready to stay invested for the long term without emphasising too much about the short-term market volatility.
Also Read: Best Indian IT Stocks For Long-Term Returns
What is the outlook for the overall Indian equity market?
Apart from the IT stocks, the Indian stock market analysts have maintained a positive stance for the overall equity market. According to an international stock brokerage firm, Nifty is expected to remain range-bound between 18,000 and 19,000 in 2023. The statement explained, “With India among the best-performing markets globally in 2022 and hitting new highs recently, valuations at 20x PE and 225 bps on yields gap are trending above 1 standard deviation levels, and remain a key overhang for market performance in 2023”.
Most financial experts have given the “Buy” tag for stocks belonging to the telecom, FMCG, real estate, and banking sectors.
Also Read: Stock market For Beginners: How To Make A Profit By Investing In The Stock Market
Impact of the Indian stock market’s performance on investors
Positive performances have contributed to a rapid rise in the number of stock market investors in India. Around 56 million new investor accounts were added by the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL) in 2022. With the Securities and Exchange Board of India (SEBI) easing its regulations for IPOs, more investors are expected to join the bandwagon in 2023.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.
Sources
2022 was a breakthrough year as far as India’s stock performance goes. Shares of several companies witnessed a rapid rise in their values as both key indices, Nifty50 and Sensex, touched their all-time highs in December. The primary drivers behind this rally were the shares of banking, oil and gas, energy, pharma, and Fast-Moving Consumer Goods (FMCG) companies.
The five best-performing stocks in India in 2022 include Adani Enterprises (up by 140%), Coal India (up by 54.7%), ITC (up by 54.4%), M&M (up by 52%), and Axis Bank (up by 40%).
However, amid this boom in the Indian stock market, shares of IT companies failed to perform up to their potential. Several IT stocks were among the worst Nifty50 performers in 2022, including Wipro, Tech Mahindra, HCL Technologies, Infosys, and TCS, among others. These stocks plummeted by 12 to 45% in their value as IT companies’ profit margins took a hit, with employees resuming work from the office and their operating costs going up.
Also Read: How To Invest In Stocks Like A Pro
How are Indian IT stocks expected to perform in 2023?
The start of 2023 saw a dip in the indices' value after they soared to their all-time high points in December 2022. As far as IT stocks are concerned, most financial experts recommend investors should proceed with caution while making investment decisions. IT sector stocks are currently experiencing selling pressures, and this trend could continue for the first half of 2023.
But at the same time, experts believe long-term investors can invest in IT stocks proactively. These stocks are currently trading at low prices, and hence, this could be a good time to buy and hold them. However, you should be ready to stay invested for the long term without emphasising too much about the short-term market volatility.
Also Read: Best Indian IT Stocks For Long-Term Returns
What is the outlook for the overall Indian equity market?
Apart from the IT stocks, the Indian stock market analysts have maintained a positive stance for the overall equity market. According to an international stock brokerage firm, Nifty is expected to remain range-bound between 18,000 and 19,000 in 2023. The statement explained, “With India among the best-performing markets globally in 2022 and hitting new highs recently, valuations at 20x PE and 225 bps on yields gap are trending above 1 standard deviation levels, and remain a key overhang for market performance in 2023”.
Most financial experts have given the “Buy” tag for stocks belonging to the telecom, FMCG, real estate, and banking sectors.
Also Read: Stock market For Beginners: How To Make A Profit By Investing In The Stock Market
Impact of the Indian stock market’s performance on investors
Positive performances have contributed to a rapid rise in the number of stock market investors in India. Around 56 million new investor accounts were added by the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL) in 2022. With the Securities and Exchange Board of India (SEBI) easing its regulations for IPOs, more investors are expected to join the bandwagon in 2023.
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.
