The last week of the calendar year 2022 proved to be a cheerful one for the markets, with major indices making a turnaround after three weeks of losses and reclaimed their crucial psychological levels of 60,800 (for Sensex) and 18,100 (for Nifty). Friday witnessed some profit booking at higher levels.
Traders took some support with reports of China relaxing its pandemic-related restrictions. A Crisil’s report noted that strong domestic demand, healthier corporate balancesheets, and a well-capitalised banking sector are expected to steer India towards a 7 per cent gross domestic product (GDP) print in FY2022-23.
The finance ministry said that India’s external debt stood at $610.5 billion in the second quarter of 2022-23, down by $2.3 billion from the end of June 2022. The external debt to GDP ratio stood at 19.2 per cent at the end of September 2022 as compared to 19.3 per cent at June-end. These positive signals helped the BSE Sensex to gain 995.45 points, or 1.7 per cent, at 60,840.74 during the week ended December 30, while the Nifty inclined 298.50 points, or 1.7 per cent, to 18,105.30.
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Market veteran Vinod Nair, Head of Research at Geojit Financial services, said: “The domestic market trend during the week was influenced by the movements of its global counterparts. Markets wavered between gains and losses as global woes over the recession and COVID spread continued to persist. US trade deficit data suggested strength in the economy, raising uncertainty about the Fed’s tightening stance. On the other hand, steps towards the reopening of the Chinese economy increased the prospects for demand recovery.”
“The ongoing volatility is expected to be sustained in the near-term because of high interest rates and a slowing economy. We believe that value buying is the theme of 2023, with a focus on domestically oriented sectors and buying on dips. Fair valuation, steady earnings, and a robust demand scenario will be the cutting parameters” Nair added.
As many as 40 stocks in the Nifty 50 index delivered a positive return to investors in the passing week. With a gain of (10.2 per cent), Tata Steel emerged as the top gainer in the index. It was followed by Hindalco Industries (up 10 per cent), State Bank Of India (up 6.8 per cent), IndusInd Bank (up 6.4 per cent), and JSW Steel (up 5.6 per cent).
Oil & Natural Gas Corporation, Titan Company, Coal India and Wipro also advanced by over 4 per cent.
On the other hand, Apollo Hospitals Enterprise, Cipla and Nestle India declined 4.7 per cent, 3.9 per cent and 2.7 per cent, respectively.
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Market strategist Deepak Jasani, Head of Retail Research at HDFC Securities, said: “Nifty after a flat start accelerated the downfall in the last half hour and ended in the negative. At close Nifty closed 0.47% or 85.7 points lower at 18105.3. India’s poor CAD number for fiscal second quarter weighed on the minds of participants. World stocks were mixed (Europe down and Asia mostly up) on the last trading day of the year as markets digested U.S. data and the dismantling of China’s zero-COVID policy.
Nifty formed a bearish dark cloud cover pattern on daily charts. However on weekly charts, Nifty closed in the positive (higher by 1.68%) after a three week fall. The 17774 level now becomes an important support level to track. On upward moves, 18255-18473 band remains a crucial resistance. Over the calendar year 2022, Nifty gained 4.3%, while for the month of December, it closed 3.5% in the negative.”
Sector-wise, the BSE Metal index gained the most 8.1 per cent during the week gone by. BSE Power has also given a 5.8 per cent return. While, BSE Oil & Gas and BSE Realty indices also surged more than 5 per cent. Only BSE Healthcare index has closed in negative territory by declining 1.1 per cent during the week.