Equity market kicks off 2023 with gains; Sensex, Nifty surge 0.5%

NEW DELHI:  India’s equity market clocked gains on the first trading day of calendar year 2023. The benchmark BSE Sensex closed the Monday session at 61,167.79 points, up 327.05 points (or 0.45%) while the broader Nifty 50 rose 92.15 points (or 0.51%) to shut shop at 18,197.45 points.

The gains came on the back of buying seen in metal stocks and GST revenues surging 15% to `1.49 lakh crore in December 2022. Among Sensex stocks, Tata Steel (up 5.8%) was the top gainer followed by Tata Motors (up 1.8%) and ICICI Bank (1.5%). Asian Paints, Titan and Tech Mahindra were the biggest laggards in the 30-share pack.

“India’s manufacturing PMI rose to 57.8 in December from 55.7 in the previous month, with new orders rising at the fastest pace since February 2021. Metal stocks led the surge following reports of China raising export duties to support their domestic demand, which is positive for India,” said Vinod Nair, Head of Research at Geojit Financial Services.

Nair expects 2023 to be a year to buy equities in anticipation that a large part of the global recession has already been factored in the market. Despite numerous headwinds such as growth rate slowing down, more interest rate hikes, recessionary fears, covid-19 worries and ongoing tussle between Russia and Ukraine, most brokerages expect India’s equity market to deliver returns in CY2023. However, their target for the year varies by a wide margin.

Sensex and Nifty surged over 4% in CY2022 after double digit growth in the previous three years. ICICI Securities believes that the BSE barometer Sensex may touch 71,600 level by December 2023, an upside potential of 17% from current values. For Nifty, the domestic brokerage has a target of 21,500 level. Emkay Institutional Equities expects the Sensex at 64,500 and Nifty to touch 19,500 by December 2023, indicating a 7-8% increase from the current levels.

Analysts at Emkay said that barring any major change in the global macroeconomic and geopolitical set-up, the increase in Nifty50’s profit after tax (PAT) in 2023 will be led by banks. They added that banks will be followed by a PAT uptick in auto original equipment manufacturers (OEMs) and ancillaries, oil and gas, and IT companies.