Benchmark indices wobbled on the last day of trading of 2022 — a year they clocked a gain of over 4 per cent, outperforming several of their global counterparts. The stock markets saw selling in the banking, technology and capital goods counters on Friday.

Market mavens said Indian stocks would continue to remain ahead of its peers in 2023 but may remain range-bound as investors grapple with a renewed surge in Covid across the world and some economies slipping into recession. For the domestic investor, the next major event will be the budget which will be the last full one before the nation votes in the 2024 elections.

Ahead of the budget on February 1, there is an expectation of a hike in the income tax exemption limit and rationalision of the long term capital gains tax. The 30-share Sensex, which opened higher at 61329.16, could not build up on its gains as the European markets opened weak. It later closed down 293.14 points, or 0.48 per cent, at 60840.74.

Similarly, the broader NSE Nifty declined 85.70 points, or 0.47 per cent, to end at 18105.30. In 2022, the Sensex saw a gain of 4.44 per cent or 2586.92 points while the Nifty rose 4.32 per cent or 751.25 points. After hitting its 52-week low of 50921.22 on June 17, the Sensex touched its all-time high of 63583.07 on December 1.

The gains saw Dalal Street investors becoming richer by more than Rs 16.38 lakh crore. “On the last day of a tumultuous year, indices shed their early gains as negative signals from global peers pushed indices lower. Investors remained concerned over the economic outlook for the New Year, underpinned by growing fears of recession,” said Vinod Nair, head of research at Geojit Financial Services.

Analysts said domestic themes were likely to dominate in 2023 as the global economy could remain under pressure on account of interest rate actions by various central banks.

While pricey valuations are likely to limit any major gains, it is felt that export-oriented sectors such as IT may remain muted. Dhiraj Relli, MD & CEO, HDFC Securities, said the emerging markets are likely to benefit from a relatively more benign world in 2023. “However, India’s trailing outperformance could take a breather in the first half. India is likely to have better growth than most parts of emerging markets due to a relatively strong macro environment,” Relli said.