Mumbai, December 31: Indian stock markets rose like a phoenix to end the volatile year 2020 as new retail investors and foreign funds relied on the country’s growth.
The S&P BSE Sensex and NSE Nifty50 rose 16 percent and 15 percent, respectively, in the pandemic year.
Market watchers say year-over-year growth may appear modest, but the fact remains that India’s two benchmark stock indexes have risen more than 80% from their lows over the course of the year. the first months of 2020.
“Nifty was fairly calm in 2019 compared to 2020. Index volatility in 2020 was much higher than in 2019,” said Deepak Jasani, head of retail research at HDFC Securities.
“In 2020, we saw a sharp drop in February, March 2020, and then a gradual recovery to lifetime highs. However, on a year-end annual basis, Nifty gained 12% in 2019 and 14.8% in 2020, meaning that the point-to-point annual returns for the two years are not much different.
Globally, indices in the United States, South Korea and Taiwan outperformed Indian indices, while those in the United Kingdom, Russia, France and Hong Kong ended on a negative note for the year.
The Chinese indices finished just behind the Indian market figures for the year.
Additionally, the two major domestic indices saw massive inflows of foreign funds, as the lockdown-induced crash at the start of the year led to attractive valuations as well as a global flood of cash and interest rates. near zero interest in foreign markets.
As a result, India received $ 22.5 billion or Rs 1.7 lakh crore in shares.
“The market performance in 2020 has been directly linked to the massive flows of FII,” said Siddhartha Khemka, Retail Research Manager at Motilal Oswal Financial Services.
“Besides FII inflows, markets have increased due to other factors such as support provided by government and RBI, progress on the vaccine front, steadily declining Covid-19 cases, improvement economic data and growing hope for strong earnings growth in the coming year. “
In addition, the domestic foreclosure, the largest in the world, flooded the stock markets with more than 60 lakh of new retail investors.
In addition, a considerable number of new investors have signed up through various plans in the mutual fund segment.
“What stood out during the market rally in 2020 was the participation of retail investors. Aided by modern technology platforms, next generation retail investors have started to invest aggressively in the market, ”said VK Vijayakumar, head of research at Geojit Financial Services.
Gaurav Garg, Head of Research at CapitalVia Global Research, said: “The most important factor that affected the markets was the election of Joe Biden as President of the United States, which was the most wanted outcome on the markets and his election sent positive sentiments to markets across the globe. “
“The relaxed monetary policy has been successful in attracting foreign investors, which has further fueled Indian markets. Arguably the rally, particularly in the last month of 2020, was led by FIIs and new retail investors. The pandemic revealed a situation of economic uncertainty which encouraged people to participate in the markets and many new traders could be seen.
Among sector indices, IT and pharmaceuticals were the best performers in 2020, followed by banking and finance, autos and consumer durables.
Infosys, Titan, Bajaj Finance, Reliance, Hero MotoCorp, Tata Steel, M&M, Hindustan Unilever, Asian Paints, Nestle, Sun Pharma, HCL Tech, Ultratech Cement, TCS and Tech Mahindra were the top performing index stocks.
(Rohit Vaid can be contacted at [email protected])
Warning: This story is automatically generated from the IANS service.
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