What's in store for the markets in the second half of FY23?
Benchmarks ended nearly flat after a challenging H1FY23. But the indices may be eyeing greater volatility in the remaining part of this fiscal. Find out how the next 6 months may shape up for markets
Nikita Vashisht New Delhi
 "Sensex versus Dow Jones")
Global turbulence, since the outbreak of the Russia-Ukraine war, led to a V-shaped market trajectory in the first half of the current fiscal.
In three months to June, investors went looking for cover as equities crashed in the backdrop decadal high global inflation and disrupted supply chains.
However, from July to September, Indian equities bounced back on the back of steady economic growth despite interest rate hikes by the Reserve Bank of India, and the return of foreign portfolio investors.
Joseph Thomas, Head of Research, Emkay Wealth Management says, H1FY23 was challenging for markets. Impact of Ukraine crisis, global inflation key dampeners. Hard money policy by US Fed, ECB, RBI impacted liquidity.
The benchmark S&P BSE Sensex and the Nifty50 indices fell about 2% each between April and September this fiscal year.
In the broader markets, the small-caps suffered sharper blows, with the Nifty SmallCap index plunging around 9.5%.
On the contrary, mid-caps were the only rewarding segment with the Nifty MidCap index climbing 3% during the period.
Among individual stocks, Adani Power, and Mazagon Dock Shipbuilders more-than-doubled investors’ wealth in six months, as they surged over 100%.
On the downside, Brightcom Group, Tanla Platforms and TV18 Broadcast cracked up to 65%.
Going forward, analysts expect India Inc’s corporate profitability to take beating in the second half of the fiscal year amid sustained monetary tightening.
Joseph Thomas of Emkay Wealth Management says tight monetary policy, dwindling liquidity to impact markets in H2FY23. Increased cost of borrowing will hit India Inc. Corporate profitability may be under threat. ‘Buy the dips’ to build long-term portfolio.
That said, the near-term texture of the markets remains uncertain, with global headwinds weighing on the sentiment.
In this holiday-truncated week, a slew of macro-economic data will guide equities including September GST collection data, Manufacturing and Services PMI data, and auto sales data.
That apart, investors may see fund-rotation ahead of the Q2 results season.
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First Published: Oct 03 2022 | 7:00 AM IST
