Up, down, left, right and roundabout like a tornado — that’s how the stock market moves. It is characterised by frequent ups and downs in share price and high volatility. Sometimes, it may even feel like it is all a swirling whirlpool of madness and there is no sense to be made of it!
If you feel like the Indian stock market’s extreme volatility may be too much for you to handle as an investor, then we’ve got the answer for you. We’ve compiled a list of the sectors that you should watch out for in 2023.
So, let’s get started!
What will the market do in 2023?
Let’s be upfront — there’s no telling what the Indian stock market will do in 2023 with 100% surety. Even the most seasoned market experts would not take that bet.
What we can provide, however, is an educated guess on how the market will behave based on the present conditions.
According to Rahul Shah from Motilal Oswal Financial Services, the sectors to watch out for in 2023 are banking and financial services, IT and automobiles.
There are several factors that are playing in the minds of investors right now.
First is a lingering apprehension about the re-emergence of COVID cases, especially in China. Nobody excepts the same sort of devastation that the second and the third COVID waves brought about. But there is still an underlying tension — people don’t know what to expect, and they’re scared.
Secondly, there is the fact that the Indian market has outperformed all its global peers by quite a margin in 2022. It reached new all-time highs and sustained at those price levels. The question that is foremost on the minds of investors now is — has Nifty topped out? Is a fall imminent?
These two factors combined together have introduced an element of uncertainty and trepidation about the future. They are the only clouds in the otherwise sunny disposition as the Indian stock market enjoys its crazy streak!
What sectors to invest in 2023?
Banking and financial stocks make up almost a quarter of our GDP and about a third of the Indian stock market. Banking stocks had quite a year in 2022. The Bank Nifty broke its all-time high and continued to scale, making new records. This streak is expected to continue in 2023.
Look for the top performers in the banking sector, and add them to your long-term portfolio when the price dips!
2022 was a muted year for IT. Bolstered by the decline of the rupee against the dollar, this sector gave quite a weak performance. But these dark clouds are to be left behind.
You see, there is no doubt about the long-term potential of some of the top performers in the IT sector. Last year was not great for a number of reasons. But 2023 will see these giants shed the worries of the last year and emerge from the shadows.
This includes the electronic vehicles segment. Like IT, 2022 was not the year for automobiles. A lot of auto stocks showed corrections in their stock price, in the range of 10-12%.
The correction that happened in the automobile sector last year leaves a lot of room for growth and improvement in 2023.