Global market performance: Here's how global equity markets, major currencies performed in 2023

Global equity markets have ended the year 2023 on a high note. Major global equity benchmarks have given double-digit returns. This outperformance was led by a cooling off in global inflation, a slide in the dollar index, declining crude, and higher expectations of rate cuts by the US Fed and other Central banks.

Also read: Nifty surges 3,600 pts, Sensex 11,000 pts in 2023: Experts explain key market themes to track in 2024 

Global Equity Performance 

In the year 2023, the majority of global equity markets have provided significant returns to investors. In the US, the Dow Jones index jumped 13.7 per cent, while the tech-heavy Nasdaq index zoomed 43.4 per cent. 

While in Europe, the German equity index DAX was up 20.3 per cent, the French CAC 40 surged 16.5 per cent, and the British stock benchmark FTSE100 increased 3.8 per cent during the year. 

In Asia, the Japanese benchmark Nikkei 225 gained 28.2 per cent, followed by India’s BSE Sensex which jumped 18.7 per cent. On the other hand, the Straits Times index of Singapore slipped 0.3 per cent, and the Chinese stock market Shanghai Composite Index declined 3.7 per cent.  

Currency Markets

During the year 2023, the US Dollar Index declined 2.2 per cent to 101.029 level. The performance of the Indian rupee in the year 2023 was a mixed bag. The rupee depreciated 0.54 per cent against the US dollar to Rs 83.186 level, while against the European currency Euro, it declined 3.63 per cent.  

The rupee, however, performed well against the Chinese yuan, Japanese yen, and Russian ruble by surging 2.07 per cent, 6.97 per cent, and 28.58 per cent respectively. 

Commodities

In the commodities segment this year, brent crude oil prices declined 10.3 per cent to $77.04 per barrel level from $85.91 a year ago. On the MCX, gold prices have surged 15.4 per cent to Rs 62,939 per 10 grams, While silver prices jumped 7.7 per cent to Rs 73,019 per kilogram as of December 29. 

Foreign Investment Trends  

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the year 2023 witnessed big investment by FPIs, thanks to the sharp uptick in flows in December.

"FPI inflows which were negative in the previous 3 months have sharply turned positive in December with total buying of Rs Rs 66134 crores. This figure includes the buying through stock exchanges and investment in the primary market. The total FPI inflows in 2023 stand at Rs 171106 crores."

The steady decline in US bond yields has caused this sudden change in the strategy of FPIs. In December, FPIs were big buyers in financial services which explains the resilience of this segment in December. FPIs also bought in sectors like autos, capital goods, and telecom. 

"Since 2024 is expected to witness further declines in U.S. interest rates, FPIs are likely to increase their purchases in 2024 too, particularly in the early months of 2024 in the run-up to the General elections," Vijayakumar said.