Sensex, Nifty rise 10% since last Independence Day; what's the road ahead?

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equity market witnessed decent gains since the last Independence Day amid sticky inflation, continuous rate hikes and a deteriorating global macroeconomic scenario. Thanks to India's robust macro indicators, the domestic market has shown remarkable resilience. "Domestic equity market has underperformed since last Independence Day with just 9 per cent returns as compared to long-term average annual returns of around 15 per cent," said G.

Chokkalingam, Founder & Head of Research at Equinomics Research. "High inflation and tight monetary policy across the world including India and the consequent slowdown in economic growth in India led to this underperformance," said Chokkalingam. Equity benchmarks the Sensex and the Nifty jumped 10 per cent each in the last one year while the Nifty Midcap 100 index surged nearly 23 per cent and Nifty Smallcap 100 index jumped 24 per cent in the last one year.

Among the sectoral indices, Nifty PSU Bank emerged as the top gainer, rising 57 per cent, followed by the Nifty FMCG index which rose almost 22 per cent. Nifty Energy (down 2.90 per cent) and Nifty Oil & Gas indices (down 2.13 per cent) failed to perform in this period. In the Nifty50 index, 24 stocks rose more than 20 per cent each.

Among them, ITC (up 46 per cent) rose the most, followed by Larsen & Toubro (up 44 per cent), Dr Reddy's Labs (up 37 per cent) and NTPC (up 34 per cent). On the other hand, shares of UPL (down 25 per cent), Adani Enterprises (down 14 per cent) and Infosys (down 13 per cent) have been the top losers in the last one year. Manish Chowdhury, Head of Research at StoxBoxhe observed that easing inflation trajectory in India and the US was the primary reason which supported gains in the last one year.