Equity Markets | Performing Sectors | January 2022



  • It has been a very volatile month for equities again. The gains of first two weeks were completely eroded in the second half.
  • Large caps and small caps outperformed (were almost flat for the month). Nifty Next 50 (-2.6%) and Midcap 150 (-1.1%) both underperformed.
  • Power (+13%) and PSU (+10.8%) were the best performing segments.
  • IPOs (-10%) was the worst performing segment, followed by IT and Pharma (both negative ~8%).
  • Financials (+7%) outperformed after many months of underperformance.
  • Autos (+6.4%) – like last month outperformed again.
  • Capital goods continued to outperform.





  • Equity:
    • Overall a weak month for global equities, many markets delivered negative returns. Higher inflation, Central Banks withdrawing covid related additional support and tensions in eastern Europe are main reasons for increased volatility.
    • Reports suggest that globally high PE stocks that benefited due to covid related spending changes have been most impacted and financials + energy sectors outperformed. It was the largest monthly outperformance for value stocks versus growth in more than 20 years.
    • US: Amongst the most Impacted markets. US Fed announced the end of bond buying program by March 2022 and start of interest rate hikes soon thereafter. S&P 500 outperformed, Smallcaps were worst performing and Nasdaq 100 underperformed.
    • European equities relatively outperformed but most of them delivered small negative returns.
    • UK: Outperformed as index has higher exposure to outperforming financials and commodity stocks and less exposure to technology.
    • Brazil: Best performing market (+7%) – strong commodity prices and successful oil auction which got big foreign investments are key positives.
    • India: After underperforming global peers for 3 months, markets delivered average performance. FII outflows intensified in the January second half.
    • China: Underperformed again (concerns of slowing economic growth and changing regulations) – worst performing market over last 12 months now.


  • Currencies:
    • Most currencies weakened versus the USD as US Fed turned hawkish.
    • Commodity currencies (NZD, AUD) weakened much more – clear risk off signals.
    • South African Rand: Amongst the best performing EM currencies. Positives for the currency include interest rate hike and relatively attractive valuation versus peers.

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