India is likely to be among the world’s top-performing stock markets this year, having overcome fears of higher interest rates and slower economic growth that have affected other countries.
The S&P BSE Sensex index added 3% in 2022, the biggest gain in the world after measures taken in Singapore and Indonesia. Stable income growth lifted India’s key indicators to their highest levels. At the same time, the MSCI All-Country World Index fell 20%.
Stocks associated with billionaire Gautam Adani and banks have benefited the most. The biggest losers were technology stocks, which tumbled after their public debuts, and software outsourcing providers, which faced fears of a potential drop in overseas demand.
However, there is a chance that the market will lose momentum next year amid higher valuations, and Goldman Sachs Group Inc. predicts a lag compared to China and South Korea.
Here are some of the most significant stock changes in 2022:
The Adani Ports-to-Power group of firms has more than doubled in value this year, with two listed companies led by Adani Power Ltd. gaining on the back of a surge in power demand. Shares of Adani Enterprises Ltd. rose 113% after becoming the group’s second firm to join the NSE Nifty 50 Index. The share price of Adani Wilmar Ltd., the group’s food manufacturing joint venture, could rise another 24% from current levels.
S&P BSE Bankex is up 18% this year on the back of effective bad debt resolution in the sector, the creation of a bad bank to get rid of bad loans, and a quick recovery in demand for loans. At the same time, the widening gap between the growth of deposits and loans should be monitored. According to some estimates, the State Bank of India has grown by 25% this year and may maintain growth over the next 12 months.
Failed large initial public offerings have seen fintech company Paytm and online insurance marketplace Policybazaar lose more than 50% this year after their trading debuts in late 2021. Companies such as the delivery startup Zomato, the owner of the online cosmetics store Nykaa and the logistics firm Delhivery also declined. The Indian Life Insurance Corporation also lost more than a quarter of its value in six months.
Outsourcing providers are also having a hard time amid fears of a possible recession in the US and Europe. Companies including Infosys Ltd. and Tata Consultancy Services Ltd. declined, dragging the industry index to its worst year since 2008.
Pharmaceutical companies Aurobindo Pharma Ltd. and Divi’s Laboratories Ltd. have also been hit by falling generic prices in the US. in turn, drug manufacturers can focus on profitable complex generics in response to lower prices abroad.
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