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We may see a bit of a slowdown for IT over next six months. So, two-quarters of more pain and then as the recession fear starts going off towards the end of the year, we could see IT coming back in favour. Markets will react three months in advance, they will give us a chance earlier but right now we are expecting lower markets going ahead.

"It has been a tough start to 2023 so far because the markets had to grapple with a lot of volatility. I think the bigger part of the volatility was the uncertainty."

After a healthy recovery over the last two-three months, 2W demand momentum has slowed down again, resulting in an expected decline of 5-7% YoY for retail volume in Dec’22.

At this point in time, both Nifty and Bank Nifty are hovering near their recent lows. For Nifty, a fresh round of selling would emerge below 17,775 whereas for Nifty Bank, the support is placed at 41,500.

The broader index ended December on a sombre note, losing 3.5%. Foreign Institutional Investors (FII) withdrew every single day last month barring one instance on 6th December, displaying their pessimism.

With increased interest from HNIs & ultra HNIs in alternate assets, particularly in SEBI-approved alternative investment funds (AIFs), we may see tax clarity coming in for the CAT III AIFs, which will be a welcome move from the industry as well as from the investors’ viewpoint.

But for global shocks, India’s inflation will moderate in 2023. Even if commodity prices were to stay flat, WPI inflation will be significantly low. Flat energy prices and reduced aggression in core price hikes imply CPI inflation could soften to ~5%. Food inflation still entails pockets of uncertainty.

Analysts say the two major factors that would determine stock price movement this month, other than global macro factors, depend on how the December quarter earnings season pans out and expectations around the Union Budget.

For a dividend portfolio, PSU stocks are known for better dividend yields. Some PSU stocks like NMDC, REC, HUDCO and Coal India have over 9% dividend yields. Similarly, private sector stocks like PCBL, Polyplex Corporation, Indus Tower and ITC also delivered decent dividends to their investors.

Most companies in the high-grade market spent the past decade binging on debt and pushing ratings down to the last rung of investment-grade. Now, as an economic downturn looms, the average blue-chip company is expected to be in balance sheet repair mode, according to Bank of America strategist Yuri Seliger.