Indian equity benchmarks fell significantly on the last trading day of 2022, but outperformed their global peers in a turbulent year for financial markets, marked by the Russia-Ukraine war, near decade-high global inflation and the resultant aggressive tightening by major central banks worldwide.
While the BSE Sensex index fell 293.14 points, or 0.48 per cent, on Friday to end 2022 at 60,840.74, for the year, the index gained over 4.4 per cent after double digit growth in the previous three years.
The broader NSE Nifty index declined 85.70 points, or 0.47 per cent, to end at 18,105.30 on Friday. Still, the index marked a 4.3 per cent gain for 2022.
On Thursday, traders positioning on the expiry of the futures and options (F&O) contracts boosted domestic stocks, with both benchmarks reversing sharp losses from earlier in the session to end the day with gains near the fag end of trading.
The uncertain outlook crushed hopes for a huge rise to close 2022. The worst run since the financial crisis, inflation returned this year and destroyed a sixth of the value of global stocks.
Few regions were spared the pain as Asian markets fell more than 19% this year, somewhat less than the loss for global equities.
As central banks raced to raise interest rates globally to contain the global surge in consumer prices, bond prices plunged 16%, the largest since at least 1990.
The largest MSCI index of equities traded in the Asia-Pacific region outside of Japan rose on Friday, but ended nearly flat in December. The index is on track to drop 19 per cent for the year, which would be its worst performance since 2008.
“I'm actually not so afraid of tech,” Sylvia Jablonski, CEO and CIO at Defiance ETFs, said on Bloomberg TV. “I do think you're going to see a recovery later in the year in a lot of these stocks and I think that investors are a little bit too afraid of them right now. They're going to miss out on a rebound opportunity in the next let's say 6-9 months.”
However, the domestic equity market held up well despite significant global headwinds that roiled financial markets around the world this year.
A stellar performance of bluechips saw the 30-share Sensex soaring nearly 13,000 points to its all-time high of 63,583.07 on December 1, in less than six months after touching its 52-week low of 50,921.22 points on June 17.
In the commodities markets, oil was set to close higher in 2022, a turbulent year marked by tight supplies from the Russia-Ukriane war.
Gold was set for it second straight yearly drop on rate-hike pressure from near decades-high inflation globally.
Going into 2023, inflation has still to be beaten, and investors will also be wary of geo-political tensions arising from Russia's war in Ukraine and diplomatic strains over Taiwan, analysts told Reuters.