The month of March 2023 was a marginal relief in terms of FPI flows. After seeing combined net outflows of $4.2 billion in January and February; March 2023 saw net FPI inflows of $967 million into equities. However, a substantial chunk of these inflows came from the $1.9 billion investment made by GQG Investments into the Adani group. If that is excluded, FPIs were net sellers on most days in the second half of March 2023. Here is a quick look at the returns on key indices for the month of March 2023 and for FY23 overall.
Sector / Index |
March 2023 Returns (%) |
FY23 Returns (%) |
Nifty 50 Index |
+0.32% |
-0.60% |
BSE Sensex |
+0.05% |
+0.72% |
Mid Cap Index |
-0.27% |
+1.15% |
Small Cap Index |
-1.76% |
-13.81% |
Nifty and Sensex have been flat in March and also for FY23 overall. However, it is the small cap index that has shown deep cuts in March and much deeper cuts for FY23. Clearly, the smaller companies are bearing the brunt of global uncertainty, especially the stress on exports, which is still predominantly driven by smaller sized companies.
Global macros took their toll in FY23
While global macros were an issue in the month of March 2023, a slew of global macro challenges afflicted markets through fiscal year FY23. Here are 4 global triggers that kept the stock markets guessing in FY23.
Overall, global triggers had an oversized impact on FPI flows and the colour of Indian equity markets in FY23.
But, there were domestic concerns too
Even as the global factors hogged the limelight, three domestic factors were also contributing to pressure on the equity markets.
Effective April 2023, India shifts to a new tax regime and that means less tax burden on the vulnerable sections. That is not to digress from the reality that inflation has caused strains on individual budgets. For now, the focus is on the global banking crisis.
Sectoral leaders and laggards of March 2023
March 2023 was a mixed month in terms of performance. Out of the 16 sectors assessed, 9 sectors gave returns better than the Nifty while 7 sectors gave returns lower than the Nifty returns for the month of March 2023.
Sector / Index |
March 2023 Returns (%) |
Metals |
4.33% |
Commodities |
3.39% |
Oil & Gas |
2.98% |
Pharmaceuticals |
2.30% |
Housing |
2.17% |
FMCG |
2.15% |
PSU Banks |
1.58% |
Infrastructure |
1.48% |
Defence |
1.06% |
Consumer Durables |
0.24% |
Private Banks |
0.15% |
Realty |
-1.49% |
Digital |
-1.57% |
Logistics |
-2.73% |
Information Technology (IT) |
-3.25% |
Automobiles |
-3.83% |
Data Source: NSE (shaded sectors outperformed Nifty-50)
Here are some key takeaways from the March 2023 equity market performance story.
Overall, the Nifty ended March 2023 on a flat note, but the range of sectoral returns were rather diverse in the month.
Sectoral leaders and laggards of fiscal year FY23
FY23 also saw a diverse performance by sectors, despite ending the year 60 bps lower. Out of the 16 sectors assessed in FY23 fiscal, 7 sectors gave returns better than the Nifty while 9 sectors gave returns lower than Nifty returns.
Sector / Index |
FY23 Fiscal Year Returns (%) |
Defence |
48.59% |
PSU Banks |
36.34% |
FMCG |
26.50% |
Automobiles |
16.03% |
Private Banks |
11.93% |
Logistics |
9.74% |
Infrastructure |
1.44% |
Housing |
-1.93% |
Commodities |
-7.36% |
Oil & Gas |
-9.12% |
Consumer Durables |
-11.44% |
Pharmaceuticals |
-11.54% |
Metals |
-14.42% |
Realty |
-16.44% |
Digital |
-20.00% |
Information Technology (IT) |
-20.98% |
Now, for some key takeaways from the FY23 equity market performance.
Overall, the Nifty ended FY23 marginally in the red. However, the budget euphoria which had started in February, did not sustain due to the negative impact of the sell-off in Adani stocks and the global banking crisis. It looks like FY24 may continue to see headwinds.
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