Gold with 15% gain is FY23’s top asset, sensex closes flat

MUMBAI: With a 1,031-point rise in the sensex on Friday, Dalal Street closed financial year 2022-23 on a high in a tumultuous year though the index ended the year flat. Among popular asset classes, gold, used as a hedge against inflation and uncertainty, gave the highest return of 15%.
Led by Reliance, which gained over 4%, the sensex closed at 58,992 on Friday.

FY23 will be remembered as the year that saw a war in Europe disrupting the global economy and the US central bank reading the inflation trajectory wrong, which it believed was transitory. China, the world’s second largest economy, went into a strict Covid lockdown that disrupted the global supply chain for the second time in three years.
In India, early in the year investors went on an overdrive to subscribe to LIC’s IPO but ended the year on a low. The insurance giant’s stock, which was sold at Rs 949 in the IPO, closed the year at Rs 535, down 44%.
The fourth quarter of the fiscal also witnessed the rapid slide in the fortunes of Adani Group after Hindenburg Research, a US-based short-seller came out with a damning report that accused the conglomerate of accounting fraud, stock price manipulation and other corporate malfeasance. As a result, the group’s total market capitalisation more than halved to about Rs 9 lakh crore from Rs 19.2 lakh crore on January 24, the day the report was released.
At the stock market level, despite substantial volatility in the domestic as well as the global markets during FY23, on a point-to-point basis, the sensex is almost unchanged: At Friday’s close it was down by 0.5% from April 1, 2022. According to market players, this is mainly because of the unabated buying by domestic mutual funds, which saw monthly average inflows of about Rs 13,000 crore through the systematic investment plan (SIP) route, about 95% of which went into equity funds.
In contrast to the mutual fund buying in the stock market, foreign funds were net sellers. As the US Federal Reserve kept on increasing interest rates, the dollar strengthened (so the rupee weakened) and overseas fund managers shifted to a risk-off mode. In FY23, while mutual funds net bought equities worth about Rs 1.6 lakh crore, foreign portfolio investors were net sellers at about Rs 1 lakh crore.