Check How Equity, Gold And Other Assets Performed Since Last Independence Day

As we mark Independence Day 2023, commemorating the nation's progress over the past year, it's an opportune moment to reflect on some self-financial goals

As we celebrate Independence Day 2023 and take pride in the growth of the nation this past year, it's worth looking at the performance of one's self-financial goals. For that let us take a look at how asset classes have performed since last Independence Day. Since August 15, 2022 equity benchmarks, gold prices, and FD interest rates all have risen, according to a report by Mint. The report noted that over the past year, there has been a significant trend of increasing interest rates in the global financial markets.

During this period, the US Federal Reserve implemented a series of rate hikes, raising its key policy rate by 500 basis points. In following this trend, the Reserve Bank of India (RBI) also has implemented a total of 250 basis points in repo rate hikes to fight inflation. 

Equity Benchmark Indices 

Since August 15, 2022, equity benchmark indices have seen a rally. According to the report, while the Sensex has risen by 10 per cent last year, the Nifty saw a 9.82 per cent gain. The rally was driven by positive factors in both micro and macroeconomic aspects, coupled with robust foreign capital inflows. The stock market's major upswing began in April 2023, following the Reserve Bank's decision to halt repo rate hikes, the report noted.

Avinash Gorakshakar, Director of Research at Profitmart Securities told Mint that looking ahead, the markets have already considered the conclusion of the interest rate hike cycle, and anticipate the market's rally to continue. The upcoming key event is the May 2024 general elections, which might introduce volatility as markets prefer political stability. Investors are cautiously observing this period of political uncertainty, as a strong and stable government mandate is favored by the markets. 

Gold & Silver Prices

Gold prices have also shown strong performance since the previous year's Independence Day. The cost of gold in the country, which stood around Rs 51,800 per 10 grams in August 2022, has now surged to about Rs 58,900, marking an impressive rally of nearly 14 per cent, the report said. Meanwhile, silver prices have increased over 21 per cent since the last Independence Day.

According to the report, the surge in gold prices can be attributed to factors such as geopolitical tensions, elevated inflation, purchases by global central banks, and substantial ETF buying. Ajay Kedia, Director of Kedia Advisory told Mint that gold prices will maintain their upward trajectory and its a possibility that MCX gold prices reaching around Rs 65,000 by December 2023 and approaching Rs 70,000 by August 2024.

Fixed Deposits

Over the past year, low-risk fixed-income investors have also benefitted from rising interest rates, leading to increased Fixed Deposit (FD) rates in domestic banks. State Bank of India's (SBI) FD rates in August ranged from 2.90 per cent to 5.65 per cent, which have now expanded to 3 per cent to 7 per cent for the general public. Some Small finance banks are offering attractive rates, with some providing as high as 9 per cent per annum interest on 5-year fixed deposits (FDs) due to accommodative RBI policies.