Amid mixed global cues, Indian benchmark equity indices closed in the red on Friday, the last trading session of 2023, dragged by banking, financials, information technology and energy shares after their recent rally.
The 30-share BSE benchmark Sensex declined 170 points or 0.23% to settle at 72,240. The broader NSE Nifty dropped 47 points or 0.22% to end at 21,731. However, the Nifty and BSE Sensex gained about 20% each this year.
Meanwhile, the market capitalisation of all listed companies on BSE surged by Rs 1.05 lakh crore on Friday, while for the year 2023, the market cap of all listed firms increased Rs 81.67 lakh crore to Rs 364.05 lakh crore.
All major sectors rose in 2023, with real estate, auto, pharma and state-owned banks advancing the most at between 34% and 80%.
The broader Nifty Midcap100 and Smallcap100 surged 0.8% and 0.6%, respectively. Small and mid-caps gained about 55% and 46% in 2023, far outperforming the blue-chip indices despite valuation concerns.
Among individual stocks, Tata Motors closed 3.4% amid reports that the government is working on a plan to replace 800,000 diesel buses, more than a third of the total on roads, with electric ones over the next seven years.
Vodafone Idea shares rallied 21%, backed by heavy volume in the counter.
The rally in the Indian stock market was driven by sustained domestic mutual fund inflows, return of foreign buying, better-than-expected economic growth, and healthy corporate earnings.
Experts View
“The market witnessed mild profit booking on the last trading day of the year. While the euphoria is expected to continue during the start of the next year on account of the exuberance of rate cuts and the drop in bond yields,” said Vinod Nair, Head of Research at Geojit Financial Services.
“We feel that though the outlook on broader indexes is moderate in the short to medium term, the large caps will maintain their vibrancy due to strong earnings growth and in anticipation of the continuation of premium valuation,” Nair said.
Rupak De, Senior Technical Analyst at LKP Securities, said, “A doji pattern has formed on the daily chart, indicating indecisiveness in the market. This sentiment requires confirmation through a decisive breakout above 21750 or a breakdown below 21650. If it falls below 21650, the Nifty could potentially decline towards 21500. Conversely, if there’s sustained trading above 21750, the index might aim for 22000.”
Global Markets
European shares advanced on Friday, with media and energy companies among the top gainers. The pan-European STOXX 600 added 0.3% and was on track for its seventh straight weekly gain as well as its best December performance since 2021.
Meanwhile, Asian stocks were mixed on Friday. Japan’s Nikkei 225 fell 0.2%, while China’s Shanghai Composite rose 0.7% and Korea’s Kospi surged 1.6%.
Tokyo finished 2023 with gains of 28.2% for the calendar year, its best yearly performance since a decade ago.
FIIs Net Buyer
Foreign portfolio investors (FPIs), who were net sellers of Indian shares in 2022 as global central banks hiked rates, returned to buying in 2023.
FPI purchases were the second-highest on record in 2023, only next to 2020 when valuations had turned favourable due to the sharp slide triggered by the COVID-19 pandemic.
Till December 28, Foreign Institutional Investors (FIIs) made significant purchases, acquiring shares worth Rs 1,71,107 crore in 2023.
Crude Oil
Oil prices are set to end 2023 about 10% lower, the first annual decline in two years, after geopolitical concerns, production cuts and global measures to rein in inflation triggered wild fluctuations in prices.
Brent crude futures were up 21 cents, or 0.27%, at $77.36 a barrel on Friday, the last trading day of 2023, while the US West Texas Intermediate (WTI) crude futures were trading 6 cents, or 0.08% higher, at $71.84.
Currency Watch
The Indian rupee’s decline in 2023 was the smallest in a six-year losing streak, while volatility hit decadal lows due to the central bank’s persistent intervention, which will likely remain a key factor governing the local unit’s fortunes over 2024.
The rupee shed 0.5% of its value in 2023, which was its smallest annual percentage change in at least 20 years. The currency ended the year at 83.2075 to the US dollar, having swung between a high of 80.88 on January 23 and a lifetime low of 83.42 on November 10.
(With inputs from agencies)
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
