The Indian markets – October 2022 are currently experiencing highs, but there are still some concerns that are troubling investors. One of the main concerns is the psychological aspect of markets, as investors often tend to book losses when markets fall, and then regret not selling at higher levels. Speak to a SEBI-registered investment advisor to tide over these emotions and make judicious investment decisions.

Additionally, technical analysis on Indian Markets – October 2022 can sometimes form patterns that suggest further falls after a recovery. However, once a strong breakout above the earlier high happens, the momentum gains strength. The key to success in the markets is liquidity, which will continue to be a driving factor.

The Previous Quarter Results

When it comes to the September quarter numbers, the overall market performance has been mixed. Sectors such as BFSI (banking, financial services, and insurance) have done well, while IT has performed better than expected. However, some sectors such as oil and gas and construction have reported lower numbers. The key to successful investing is to identify specific companies that are delivering consistent average performance and remain invested in them. The sectoral analysis is important, but it is also important to note that there will be strong outperformers in an industry that is lagging and underperformers in a sector that is otherwise doing well.

Banking Stocks

Banking stocks have recently been back in the limelight, which is a positive sign for the economy. Banking and financial services are the major contributors to the Nifty weightage, and the positive outlook for the economy can be sensed from how banking stocks are performing. The trend is expected to continue in 2023 as well.

Dollar Index

The dollar index is moderating, which is a good sign for India. From a FII (foreign institutional investor) perspective, India is an attractive destination due to the consumption-led growth and the government’s willingness to spend on infrastructure. The IMF has also stated that India continues to be a “lone star” in an otherwise gloomy global environment. The liquidity of the markets will drive short-term movements, but the long-term journey is expected to be firmly on the up.

Tech Selloffs in the US

There has been a recent selloff in some of the global tech giants, which has sparked a debate about whether this is the first sign of an upcoming recession. While the US, the largest economy in the world, has already seen 2 consecutive quarters of negative growth, which is the most common definition of a recession, it is still yet to be officially declared by the NBER (National Bureau of Economic Research). India, however, appears to be in a much stronger position. It is important to note that recessions are relatively short, and should not be confused with depression.

Another growing debate is the rise in FD (fixed deposit) rates and equity returns. In the past, when interest rates were on the rise, the market performed well. It is important to note that equity returns are not directly proportional to interest rates.

Conclusion

As for the current market, we are a few per cent away from record highs, but it is hard to predict if a new bull cycle in 2023 ahead of the Budget 2023 will occur. However, our view as SEBI Registered Investment Advisors, is that the long-term journey of the markets is expected to be firmly on the up. It is important to focus on specific companies that are delivering consistent average performance and remain invested in them, rather than solely relying on market predictions.