The entire 2022 was nothing less than a rollercoaster ride for the Indian Stock Markets. The markets began their 2022 journey at 17625 points with a gain of 1.5% on the first day of 2022. However after that the journey was a bit troublesome for the traders. Due to a war between Ukraine and Russia the trade cycle of the world went down the line. The markets went below 15500 points to make a 52 week low of 15183 points during the month of June.
However the recovery was a bit stronger than expected. The markets recovered heavily within a time of 4 months and made a high of 18887 points during the months of December. Again due to COVID crisis in China a fear was spread across traders and investors leading to a short covering in the Nifty 50 of 800 points. The entire year’s markets ended at 18197 points registering a 3.2% growth for the index.
This year made the traders and investors understand the importance of averaging. The markets made a movement of nearly 25% from 52 week lows to 52 week highs. Hence the indices were the heroes for the people who knew how to do quick trading within the range of gains and losses.
Apart from Nifty50, Bank Nifty also rendered huge gains during the year. The index started off the year with a 2.65% gain at 36421 points and settled the year at 42986 points. This means the index made a gain of 18% if a person held the position from the starting of the year and did not sell the same till the end. The 52 week high for the same was 44151 points and the 52 week low was 32155 points.
The Market Events
The entire year witnessed numerous market events which changed the entire direction. This was the Russia and Ukraine War situation. When Russia invaded Ukraine all the markets across the world went into panic mode. Everyone feared another World War situation. The reason was huge support from the U.S.A, U.K and E.U. for Ukraine and Russia fighting them all at another end. But later on the situation became less intense and in the last days of December Russia announced that it wants to end the war and hence a meeting will be held for the same.
Due to the war situation the economy that was already disrupted due to COVID crisis showed extreme heights. Multiple nations went on to face recession including the United Kingdom. Huge amount of inflation was also noticed in America.
With the effect of such a crisis the Fed imposed a stronger interest rate hike in America. In India RBI had already been imposing a stronger rate hike policy. One good thing for India in this scenario is that the world now knows about the economic strength India can achieve with perfect measures to tackle every situation. When the world was suffering from inflation, India was able to control it down and declare to the entire world that it would not be facing recession.
The Indian government was swift to tackle the war and COVID situation with direct implication of interest rate hikes. Alongside this the government was keen on acting on Russia’s offer of discounted crude oil imports despite strong opposition from the U.N. This resulted into a major profit for the Indian companies and it gave a huge savings in Crores of Rs from the discounted Crude.
Apart from this India is proving its supremacy among nations as the latest news suggest that Sri Lanka and Russia are considering to shift their international trade currency to Indian Rupee. Not only them, many other nations are finding an option for the U.S. dollar and Indian Rupee is their next stop of thought. If this goes into application then India will receive huge benefits in terms of its INR valuation against any foreign currency.
The overall scenario of the markets suggested the winner of the race was Finance Segment. The Finance sector showed constant support for the Indian indices in times when the Tech Sector was suffering given the inflation crisis in the foreign countries. The Indian Tech companies have a major chunk of their business or clients in other countries including U.K, U.S.A and E.U. Due to inflation such nations have been suffering from huge business loss and an unstable economy which is affecting the tech companies.
Hence one can expect that when the markets get normal the tech companies will be the best pick as major ones among them have lost almost 40 to 60% of their valuation due to such tough times. Overall the fintech companies are also suffering alongside the ed-tech companies. The energy segment is currently at the rise and the automobile industry is slowly shifting towards electrical passenger commercial vehicles.