This edition of chart of the week takes a look at the performance of the benchmark index Nifty 50 in 2022 as the year comes to an end. The Nifty 50 rose 2.8% in 2022 despite facing pressures from rising inflation and global conflicts.

The earliest signs of pressure on the stock market  came when the index fell 2.9% during the week ending January 23. The fall came as Brent crude prices rose to the highest level since 2014 at $87.5 per barrel, due to supply chain issues caused by a militant attack in Abu Dhabi and the anticipation of a hike in the US Fed rate. 

The weeks ending February 20 and 27 saw the index fall by 3.6% and 2.5%, respectively, as geopolitical tensions between Russia and Ukraine intensified with Russia invading Ukraine. February 24 saw the Nifty 50 fall by 4.8% as the Ukraine crisis made headlines worldwide. It was the largest daily fall in 2022 as Brent crude prices rose 2.3%, nearing the $100 per barrel mark.

The week ending March 13 saw the Nifty 50 rise by 3.9% aided by the fall in crude oil prices of more than 10% over the past two weeks. The largest rise that week came on March 9 as the index rose 2.1%, as markets cheered  Brent crude prices falling 13.1% to $ 111.1 per barrel. The oil price decline came amid reports that Iraq would increase production at the discretion of OPEC+.

The index fell 3.8% during the week ending May 9 after the Reserve Bank of India (RBI) hiked the repo rate by 40 bps to 4.4% in an emergency meeting held on May 4. The RBI also increased the cash reserve ratio by 50 bps to 4.5%.

June 7 was a double whammy for the Indian stock market. The RBI imposed another repo rate hike by 50 bps taking the interest rate to 4.9%, while Brent crude prices rose 2.5% to $123.6 per barrel on June 7. These events caused the Nifty 50 to fall by 5.6% during the week ending June 12, the largest weekly fall in 2022. 

Over a month later, the week ending July 17 saw the index rise by 4.2%, the highest weekly rise in 2022. The rise came as inflation eased up and the consumer price index (CPI) fell more than expected to 7.01% from 7.04%.

October was a strong month for the Indian market as foreign institutional investors turned optimistic in the face of India’s falling inflation, and started investing in the equity market on October 4. The index rose by 1.7% on November 11 in response to the US indices rising the most in two years as the US CPI fell to 7.7% in October. More recently, the index fell 1.8% on December 23 as a new strain of Covid, omicron BF.7 variant broke loose in China and cases started to crop up in India.