Expectations From The Indian Stock Market In 2021
In 2020, Nifty50 went on a bumpy ride—making a low of 7,511 in the month of March, however, recovering by the year-end and reaching an all-time high of 14,024. We witnessed a sharp fall in the month of March when Nifty50 went from 11,380 levels to 7,500 levels, mainly due to the coronavirus panic.
The coronavirus panic led to a Sensex fall by two per cent after the government announced the Union Budget on February 1, 2020. Followed by the worst weekly fall since 2009, as the WHO announced the coronavirus as a pandemic, on February 28, 2020.
Here’s a month wise reflection of 2020 events that affected the price movements of the Indian stock markets:
- In the beginning of January, Nifty50 touched an all-time high at 12,400.
- The first case of COVID-19 was reported in India on January 27.
- The Union Budget was announced on February 1 and the market fell in the next session by 250 points.
- We saw the biggest one day fall in obsolete terms on March 6, when Nifty fell by 868 points amid global selling.
- Nifty ended 431.55 points down at 11.201, and thus made the worst weekly fall for Nifty since 2009.
- The 21-day lockdown was declared on March 24.
- A big recovery came in the market as Nifty surged 708 points on March 25.
- 1,000 cases were registered in India by mid-April.
- On May 19, cases in India crossed the 1 lakh mark.
- Economic stimulus worth 20 lakh crores was announced, along with a push for Make in India.
- At the end of May, India and China border tensions escalated.
- At the beginning of August, gold touched an all-time high of 57,000, as interest continued in safe havens.
- India’s GDP contracted.
- In the month of October, sales in many sectors reached the pre-COVID levels and green shoots appeared in economic indicators, with GST collection, petrol demand and PMI recovering to pre-COVID levels.
- In the months of November and December, Nifty continued to make new highs.
16. Despite all the above events, Nifty has climbed higher, especially at the end of the year, and gave us some signals on what lies in the year 2021.
Market Expectations 2021
The Indian economy would return to normalcy in 2021. In the first few months of 2021, certain events like the COVID vaccination, the Union Budget, and the US government’s new policies will be key driving factors.
This New Year might also expect to see the stock market and economy align with each other. Also, there are many IPOs including that of Indian Railway Finance Corporation, Indigo Paints Ltd and, Home First Finance Company India Ltd that will greatly benefit the overall Indian economy, and will also provide capital to the companies which will drive the overall Indian economic growth.