Experts view on Indian stock market in 2023, which sectors are on focus

 The Indian Stock Market is currently trading at its heights. Every investor is thinking that in the beginning of the year 2023, which are the sectors in which investing can benefit them?  Before we discuss the future outlook of Indian stock market for the year 2023, we have to understand that How much return Indian stock market had given in the year 2022.

How indices of Nifty & sensex performed in the year of 2022?

We would like to remind you that the year 2022 was not good as compared to year 2020-21  In  the mid of 2020 to the year 2021,  we had seen huge run up into the Indian stock market as well as into the world markets. If we will check then we will find that year 2020 ended with only Single digit of gains for domestic equity investors

In the year 2022, Sensex raised nearly 4.4% & the Nifty 50 ended the year with a gain of 4.3%. Investor’s friendly segments Midcaps and smallcaps stocks had underperformed. Further, Nifty Midcap 100 index had shown run up by 3.5% & Nifty Smallcap 100 index had suffered a substantial loss of nearly 13% to 14% in between.

Which sectors stocks had given negative returns into the year of 2022?

If we will check the performance of Other Sectors  then Realty sector was down by nearly 11%, Pharma sector had also underperformed and had given negative returns about 11% to 12% in between. Most investor friendly as well as trader’s friendly sector IT was also down 26%.  Media sector had given negative returns and ended in the red with 10% down also.

The year 2022 was challenging for retail investors as multiple headwinds kept them confuse for making new investment into the equity market especially on February 24, 2022, when Russia & Ukraine war had started. Also during this period, the world witnessed a sharp rise in inflation which leads to aggressive rate hikes.

Which Sectors stocks had given Positive returns in the year 2022?

On the positive side, PSU Bank index was into the limelight at the end of 2022 with a gain of almost 70% to 71% & this sector index was remained at the top among its peers. On the other hand, Metal sector index had recorded healthy gain of nearly 22%. Nifty FMCG and Auto indices rose by nearly 17.8% and 14.9% respectively.

Upcoming Even and factors which may impact on Indian stock market in year of 2023:

Upcoming important events like Union Budget, macroeconomic trends, central bank’s monetary stance &  factors like Companies quarterly earnings, stock market valuations, inflation, , commodity prices, geopolitical factors like upcoming  state may have positive or negative impact on the Indian stock market in the year of 2023.

 How Indian stock market can perform in the year of 2023?

The road ahead is still challenging because the risk of inflation still persists and rate hikes have raised concerns about a recession in the West side.

As per our view, First half of the year 2023 for Indian stock market will be quite similar with the year 2022 due to persisting concerns. Also the Indian stock market valuations are bit on higher side but still we believed that India will have better opportunities of growth as compared to other countries due to the strong macro environment. Also various policy reforms implemented in the past few years have set the ground and will enhance the financial savings if unemployment rate will decrease.

We may we decrease into the inflation rate after the second half of the year 2023 and it will lead to stop the rate hike cycle & market  may offer new opportunities to investors. But chances are higher that we can see profit booking into the Indian stock market anytime in the year of 2023.

Which Sectors stocks can give good profit to the investors in the year 2023?

Manufacture & credit growth may play out in the year 2023. However, we can’t ignore the CAPEX in Private especially ahead of the general elections in the year of 2024. The central government of India may have focus on CAPEX Private in 2023.

Indian government focus on schemes like Make in India & Atmanirbhar Bharat will give boost to the manufacturing sector which contributes to GDP higher from the current nearly 14% to 15%. Strong demand of loans can also give support to Indian banking sector.  Considering all these factors,  we have selected some such sectors for the investors of our website, which can be expected to grow in the coming future, by investing in the stocks of the companies of these sectors, you can earn good profit. If seen, the Indian economy is coming back on track since the Covid 19 period. However, some ups and downs have also been seen in the Indian market for some time. Despite this, foreign investors and Indian investors are investing a lot in the Indian stock market and the attitude towards the market has been very optimistic. Due to which it can be expected that the year 2023 can also be very promising for the Indian stock market. In such a situation, let us understand which are the major sectors in which investing can be a profitable deal.

Energy Sector:

Due to the increasing demands of green energy and renewable energy, this sector has been growing since few years and Government of India has also focus on this sector. In the coming few months, we may some good news for Energy sector so we can say that there is a possibility of seeing more speed in the coming years.

Infrastructure Sector:

Government investment remains the highest in the infrastructure sector. However, investing in this sector is also a bit risky because the debt in the companies related to the infrastructure sector is high and the projects of these companies take a lot of time to complete, for which working capital is needed. The year 2023 can see a boom in this sector due to heavy investment through government schemes. Therefore, this sector is likely to be very good from the point of view of investment. More risky & more profit is always related to this sector.

 

Banking and Finance Sector:

Banking sector is the backbone of any country's economy. Indian economy also focuses on the banking sector, so investing in good stocks of this sector can give you very good returns in the coming times. However, for investing in this sector, investors will also need some caution and research.

IT sector:

 Even there is a risk of deep recession in Europe & USA remains but we believes that  too much pessimism has been priced in this sector. Revenue growth in USD is also expected to remain in double digits which will help the sector to witness a margin improvement. As per our view, IT sector provides comfortable valuations with low levels of downside risk.

Automobile sector:

If unemployment rate will decrease then the rural income as well as urban income will also increase. These factors will lead in demand of Automobile sector. Don’t forget, due to upcoming elections of 2024, Current Indian government will have focus on increase the employment opportunities for youngsters in India. Also the year 2022 has not been special for the automobile sector, but with the expectation of increase in demand of the electric vehicles, we may see big change in this sector & impressive growth can be seen in automobile sector in the coming months. Automobile sector can benefit due to large order backlog, easing of supply bottlenecks.

In nutshell, from what has been discussed above, It can be concluded that, Indian stock market is trading at very higher valuations at current time. Investors should stay alert in the first half of year 2023 but second half of  year 2023 can be the good year for investors of equity market in case there will not be a any big bad news come into the market related to Indian economy and world economy. Our website viewers can keep eye on the sectors we discussed above by keeping the factors as well as upcoming events in the year of 2023. Do not rush and start making new investment into the Indian stock market at current levels of Sensex and Nifty. Wait for right time to start making new Investment on some correction into the market.