As the world steps into 2023, global factors, like recessionary fears, geo-political risks, and rising Covid cases in China could keep the equity markets volatile, and the investors would have to be calibrated in the approach while picking stocks as investments. Top picks by Motilal Oswal Financial Services for 2023 include those of Infosys, SBI, ITC, L&T, Axis Bank, Maruti, Titan, Ultratech, Apollo Hospitals, P I Industries, Macrotech Developers, Indian Hotels, Bharat Forge, and Westlife Foodworks.
The year 2022 turned out to be a roller-coaster ride for Indian stock market investors as the benchmark indices oscillated between bears and bulls. The graph of benchmark indices – Sensex and Nifty – in 2022 shows at least four major ups and downs with varying intervals with the first being during the initial days of the war in Ukraine. Despite a roller-coaster ride, Nifty gained about 3 per cent in 2022 as compared to a 10-20 per cent fall in most of the global indices.
The driving force behind India’s outperformance, Motilal Oswal said, is a pick-up in capital expenditure by the government which revived the Indian economy from the Covid-led slump, firm GST collections, and e-way bill generation. “India stands out like an oasis in the desert, where the rest of world is facing multiple challenges,” brokerage Motilal Oswal said.
In 2023, monetary policy actions by US Federal Reserve along with RBI would hold importance and any moderation in interest rates hike might encourage markets to pick up momentum. The US Federal Reserve policy rate is now at a target of 4.25-4.50 per cent, the highest level in 15 years, which was near zero in the early part of 2022.
The RBI hiked the key policy rate by 225 basis points since May to 6.25 per cent to cool off domestic retail inflation that had stayed above the RBI’s upper tolerance limit for over three quarters. Raising interest rates typically cools the demand in the economy, thereby putting a brake on inflation. “We expect two themes to play out in CY23 viz. credit growth and capex and thus sectors like BFSI, capital goods, infrastructure, cement, housing, defence, railways could be in focus,” Motilal Oswal said.
