Deepak Jasani, Head of Retail Research, HDFC Securities, addressed the future conditions of the stock market in 2023 and has notified of the trends that the market may face in the years to come. The outlook suggested by Jasani warns of flat returns in the years to come and advises investors to review and upgrade their portfolio every quarter and eliminate the non-performing stocks. He states that the year 2023 will be similar to 2022 in terms of equity, and the yields may not be very high owing to higher volatility. Along with his analysis of the budget, Jasani mentioned a lot of facts and figures for investors and traders for the year 2023.
Key Challenges & Market Factors For 2023
Jasani pointed out that the Union budget could prove to be a factor that affects the trends of the share market and an overall downtrend in the stock market’s performance. In the year 2023, if the interest rates stay elevated, global investors may also keep a back foot in terms of risk, leading to a high cost of capital, which may take a toll on equity valuations.
For the Indian stock market, the roads are murky, and Jasani predicted a low/negative return on investment in the year 2023. Regarding global stocks, the market will not see any fluctuations unless the Fed changes the interest rates. The only scope that can bring a turn in the conditions is the economic recovery in the global and domestic stock markets.
The Effect Of the Fed Policies and Global Slowdown
Amidst the rising inflation, the Federal Reserve has slowed down the interest rates. The reserve has increased its benchmark rate of 4.25 to 4.5, which is being revised as the highest for the first time in 15 years. The economy will also see an unemployment spike in the year 2023. The year could also see a recession, and the interest rate spike could make the equities less attractive.
This global slowdown has its own implications for the Indian economy. The effects of the slowdown have different impacts on the economy. The Indian economy has seen a rise in inflow on account of FPI, but the positive trend that the Indian economy is experiencing will not be followed throughout the year.
Sectors That Could Put Up A Good Show
There are sectors and domains that could show significant signs of growth in the year to come. The automobiles, Industrials and BFSI could outperform the index. The defence and renewable stocks can also see good growth, giving its shareholders a good return. When it comes to buying new stocks, investors can try their hands with the tourism industry after the upsurge in travel post the pandemic. A good performance is also expected from small and mid-cap stocks. While shortlisting the stocks, it is essential to keep margins in mind, return ratios and governance practices so that the stock yields long-term returns. While investing in listed stocks can yield good returns, if you want to earn better returns, you can always buy and sell unlisted shares of the companies.
Apart from this, the automobile sector can also see a substantial rise owing to the surge in the volumes of passenger and commercial vehicles and the improvement in the OEM (Original Equipment Manufacturer). Even after this rise, the export market has seen a downfall. The banks have also seen growth as the number of loans are rising due to seasonal demands. Along with banks, financial services companies can also witness good growth. You can invest in unlisted shares of the company and get the best returns. Shares like HDFC Securities Limited unlisted shares can give you substantial returns.
What Is In Store For the Pharma And Medical Sector?
According to Deepak Jasani, Head of Retail Research HDFC Securities, the sector has the potential to grow, but currently, it is not performing well in line with Nifty. Investors still consider pharma shares to be a safe haven to fall back on. This wave of optimism can be seen as the domestic market has performed well in the past year, and the exports have also been stable in the few quarters on account of reduced price competition.
Words of Advice
For all seeking advice and suggestions before investing in the market, Jasani states that it is necessary that investors must keep a check on their portfolios. Removing the non-performing shares and keeping an eye on the stocks that have shown significant profits in the past quarter can help investors sail through uncertainties. If investing in listed shares is not what you are looking for, then the unlisted market domain is open. Trading in an unlisted market can open up the options for investors to have multifold returns. Stockify can be an excellent option to start trading in an unlisted market domain.