Emerging Trends - March 2023 ?

The Indian equity markets are facing a turbulent time as the benchmark indices Sensex and Nifty continue to decline for the second consecutive session. The reasons behind this trend are numerous, including a bearish trend in Asian and European markets, a depreciating rupee, and fresh foreign fund outflows.?

Sectors like metal, realty, and energy are facing the brunt of this trend, while IT stocks are limiting the losses. Investors are feeling cautious due to concerns about the recent turmoil in the banking sector and the looming threat of an economic slowdown.?

The Indian markets are navigating choppy waters, and it remains to be seen how the situation will pan out.

?Let us look at some data and find out more

Global Market

The global markets have been on a rollercoaster ride as the US Federal Reserve walks a tightrope with its rate hike path. While inflation has eased, recent hikes are shaking up the banking industry and hitting smaller players hard. However, hopes of a rate-hike pause have led to a rally in the Nasdaq and major rate-sensitive technology and growth stocks, while communication services and technology shares lead the gains among S&P 500 sector indexes. Investors are betting that we have reached a peak in rate hikes, but the Fed's warning about tighter credit conditions for households and businesses reminds us that the bumpy ride is far from over. India continues to remain an underperformer in 2023.

Sector Performance

The year 2023 has been a turbulent one so far for the Indian markets, with some sectors experiencing rough times. The utility sector is feeling the burn with a staggering -19.7% decline, followed closely by the banking sector at -17.6%. Meanwhile, the consumer discretionary sector is down by -15.4%, and consumer durables took a hit at -13.3%. The real estate sector has also felt the pain, dropping by -12.8%. On the other hand, the energy sector is experiencing positive growth, up by 3.3%, followed by industrials with 1.3% growth. Investors should keep an eye on the ever-evolving trends and choose their investments wisely in these challenging times.

Industries Performance

The Indian markets are facing a mixed bag of industry trends in 2023, with some sectors recording negative returns and others performing relatively better. The trading sector is witnessing the highest decline in returns, followed by NBFC asset management companies and public banks. The power generation and supply sector is also facing a significant decline, while the private banks are showing signs of recovery. The pharmaceuticals sector has shown a slight improvement, while the electric equipment and general sector is performing the best with positive returns. As the year progresses, it will be interesting to see how these trends evolve and how investors adapt their strategies to navigate the market's changing dynamics.

Factor Performance

The current trends in the markets have led to a mixed bag of results for various factors. While some have taken a big hit, others are showing positive returns. The Alpha 50 factor seems to be bearing the brunt of the volatile markets, with expected returns down by a whopping 15% in 2023. This is followed closely by the Momentum 30 and ESG factors, which are down by 8.5% each. However, the Dividend Opportunities 50 factor is expected to perform well with positive returns of 0.37%. The Growth Sectors 15 factor is also showing some promise, with expected returns of 2.36%.?

Conclusion

In conclusion, the Indian markets are going through a period of uncertainty, and investors need to be cautious with their investment decisions. While some sectors and factors are struggling, others are showing promise. The market's volatile nature is a reminder that investing is a long-term game, and one should stay focused on their investment goals despite short-term fluctuations. As we move forward, we hope that the markets stabilize and offer better returns to investors. Until then, buckle up and enjoy the ride!

Where to Invest?

Investing in the Balanced ?? Multi Factor portfolio is a smart choice in today's market. With the volatility and uncertainty that investors face, having a strategy that is adaptable and diversified is crucial for long-term growth. This portfolio offers just that, with its dynamic allocation approach that adjusts to changing market conditions and diverse equity themes that provide resilience during both trending and volatile markets. In addition, the portfolio includes bonds, gold, and international ETFs, providing a well-rounded investment mix for optimal risk management. With proven performance, regular rebalancing, and smart stock selection, the Balanced ?? Multi Factor portfolio offers a dynamic and reliable investment approach.