While domestic stock markets outperformed most Asian and worldwide rivals last year, there has been a downturn due to the global economic slowdown and recession worries. Domestic equities markets are anticipated to be under pressure as investors become cautious ahead of the publication of the Union Budget 2023 on 1 February. Volatility has risen in recent trading sessions due to fears about slowing economic growth and increasing selling pressure from international institutional investors (FIIs).

Have the Indian Equities Markets Dropped Lately?

While domestic stock markets outperformed most Asian and worldwide rivals last year, there has been a downturn due to the global economic slowdown and recession worries. Investors should not be shocked if they rule Dalal Street in the following weeks since Indian equities markets have typically dropped by at least 1% a month before the budget.

The S&P BSE Sensex has dropped more than 3%

This year, however, the benchmark indexes – the S&P BSE Sensex and the NSE Nifty50 – have been trading lower ahead of the budget as many external variables prevent the bulls from seizing control of Dalal Street. The S&P BSE Sensex has dropped more than 3% in a month as FIIs continue to unload their assets, particularly in crucial sectors such as banking.

According to market analysts, this tendency might further erode local equity markets before the budget. Higher selloffs indicate a worsening global economic condition and that many companies have grown expensive to other Asian markets.

Conclusion

Investors in the stock market are also concerned about the impact of the global economic downturn on India, with leading experts predicting a decline in nominal GDP growth. In such a scenario, the Union Budget 2023 announcements will be essential in defining the future course of domestic markets.