Portfolio Management Service

2021 – Market Recap

2021 started with positive anticipation as the vaccines were being distributed. It was believed that it would mark the end of the pandemic. Unfortunately, covid cases are back again, which is a matter of concern for the year ahead. However, if we look back to the year 2021, there has been a movement of ~10,000 points in Sensex, which is ~21.3%, as compared to ~15.8% of last year. Nifty 50, has risen by ~3,350 points, which is ~23% as compared to ~13% of last year. In short, 2021 has been one of the best years.

If we compare Sensex with the world’s major indices, India ranks 3rd after S&P 500 and CAC40. And this performance was driven by domestic retail investors. The investment in 2021 was ₹ .82 tln against ₹ .54 tln of last year. Not to miss the ~27.4 mln Demat accounts that were opened till November (SEBI), as compared to 10.5 mln and 4.5 mln of 2020 and 2019 respectively.

The Year 2021 Was Marked By Several Highs & Lows Including Developments.Let\’s Have A Look At It:

>As demand for digitalization rose, India\’s startup ecosystem saw a record investment of about $36 bln in privately-owned companies this year.

>NFTs broke out of their specialty and it became one of the year\’s top tech breakthroughs for India.

>India\’s crypto marketplace grew 641% from July 2020 to June 2021. In August, India ranked second in crypto adoption amid a bull run in cryptocurrency assets globally.

>More than 65 companies launched their IPO\’s, raising a record Rs 1.3tln from the primary market in a year. One97 Communications, the parent of Paytm, raised Rs 18,300 crore-the largest IPO of the year.

>2021 has been a year of startup for India replacing the UK to be 3rd top country for hosting unicorns. The list is led by ed-tech startup Byju\’s with a valuation of $21 bln.

>Much awaited RBI scheme for retail investors is now live after PM Modi has given it a green signal. A common man can now directly invest in Treasury bills, Government securities without paying any distribution charges.

>PM Modi announced the rollback of the three farm laws. The repeal of the farm laws has brought negative investor sentiments towards FMCG sector companies who were supposed to be the biggest beneficiaries of the law.

Just as everyone was settling down for the end of the epidemic as India celebrated the completion of 1 bln vaccinations in Oct’21, the Omicron form was discovered in India in December, causing market anxiety. The market is volatile and fell 9% from an all-time high in these last two months. Most sectors are ending in the red, with realty and FMCG sectors losing the most falling 7.5% and 4.5%, respectively.

While it\’s essential to look back on market movements, it is more important to realize that in the short term, the market is likely to be fragile. However, with global economic forecasts for the year 2022 continuing to be strong, it\’s safe to predict that the economy will recover strongly over the medium to long term.

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