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The Indian equity market gave solid returns in financial year 2022, despite geopolitical turmoil playing spoilsport in the last quarter of FY22. An analysis by domestic brokerage house Motilal Oswal Financial Services showed that in FY22, Nifty50 recorded an impressive 19% year-on-year gain and ended the financial year with the second-best returns in seven years.
Following the escalation of the Russia-Ukraine conflict, foreign institutional investors (FIIs) ditched Indian equities as crude oil-led macro and micro impact made Indian stocks less attractive. Nonetheless, domestic institutional investors (DIIs) came to the rescue. DII flows into equities in FY22 were the highest ever at $26.8 billion compared to outflows of $18.4b in FY21, while FIIs witnessed equity outflows of $17.1 billion after five consecutive years of inflows, as per the Motilal Oswal report.
Sectoral indices also posted decent performance during this period. "Top gainers in the sectoral space were Utilities (+63%), Metals (+62%), Media (+54%), Oil & Gas (+42%), Telecom (+42%), and Technology (+40%). While Private Banks, Consumer, Autos, and Healthcare underperformed," added the report. Also, market breadth was positive in FY22, with 37 Nifty constituents closing higher.
Stock-wise, Bajaj Finserv Ltd, Hindalco Industries Ltd, Titan Industries Ltd, Tata Steel Ltd, and ONGC were the top performers. On the other hand, HDFC Life Insurance Company Ltd, Hero Motocorp Ltd, Shree Cement Ltd, BPCL and Hindustan Unilever Ltd were the top laggards.
Broader markets also put up an impressive performance. The Nifty Midcap 100, up more than 25% y-o-y, and the Nifty Smallcap 100, up more than 29% y-o-y, outperformed the benchmark in FY22, showed the analysis.
Meanwhile, going into FY23, corporate earnings would be key among the many factors that will decide the market mood. The March quarter numbers for FY22, will throw light on the impact of the Russia-Ukraine crisis on the margins of companies relying on crude-based raw materials.
IT giant Tata Consultancy Services Ltd will kick-off the Q4FY22 earnings season, with results scheduled for 11 April.
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