D-Street: Investors' wealth rises Rs 90.82 lakh crore in one year

Market analysts termed 2020-21 a roller coaster ride for not only Indian markets but also for equity indices globally due to the pandemic. But with markets making a comeback towards the latter part of the fiscal year, investors were rewarded with high returns.

New Delhi: Investors' wealth grew massively by Rs 90.82 lakh crore in 2020-21 driven by an extraordinary rally in the equity market, where the benchmark Sensex jumped 68 per cent.

In an unprecedented rally, the 30-share BSE Sensex jumped 20,040.66 points or 68 per cent this fiscal year, braving many uncertainties due to COVID-19-led disruptions.

Thanks to the improved investor sentiment, the market capitalisation of BSE-listed companies zoomed Rs 90,82,057.95 crore to reach Rs 2,04,30,814.54 crore in 2020-21.

On March 3 this year, the market capitalisation of BSE-listed companies had reached its lifetime high of Rs 2,10,22,227.15 crore.

The BSE index closed 627.43 points or 1.25 per cent lower at 49,509.15 on the last day of trade of the fiscal year 2020-21 on Wednesday.

Read:|Landmark amid pandemic: Sensex breaches 50K mark

Overall, Sensex zoomed a massive 20,040.66 points or 68 per cent while Nifty skyrocketed 6,092.95 points or 70.86 per cent despite COVID-19 blues during the financial year 2020-21.

Whereas, the BSE barometer had plummeted 9,204.42 points or 23.80 per cent in 2019-20.

In FY 21, investors witnessed a wide array of emotions from witnessing massive losses to record-breaking gains.

The remarkable rally in the markets is significant as equities had gone into a tailspin in March 2020, with the Sensex sinking a massive 8,828.8 points or 23 per cent during that month as concerns over the pandemic's impact on the economy ravaged investor sentiments.

However, the markets have started recovering as the economic activities were allowed during the unlock phase followed by vaccine-related developments.

"The bull-run got further strength with the progressive unlocking and sharp rebound in the economy. The discovery of vaccines and the optimism it generated gave further strength to the bulls. Globally, markets witnessed a huge rally in November. Emerging markets continued to be flooded with FPI money," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

Read:|Sensex tanks over 400 pts in early trade; Nifty slips below 14,800

At the end of the financial year, Reliance Industries is the country's most valued firm with a market capitalisation of Rs 12,69,917.01 crore, followed by Tata Consultancy Services (Rs 11,75,410.56 crore), HDFC Bank (Rs 8,23,360.73 crore), Infosys (Rs 5,82,751.89 crore) and Hindustan Unilever (Rs 5,71,132.95 crore) in the top five order.

Sensex scales 50k peak

The benchmark Sensex hit record highs multiple times during this financial year.

The frontline index had closed above the 50,000-mark for the first time on February 3 this year, mainly driven by euphoria over the Union Budget.

It closed above the 51,000-mark on February 8.

The index rallied over the 52,000-mark for the first time on February 15.

Sensex closed above the crucial 50,000 level on 12 occasions out of the total 21 trading sessions in March.

Similarities between FY10 and FY21

On the performance of key indices in FY21, Joseph Thomas, Head of Research, Emkay Wealth Management, said it was largely due to the low base in the preceding financial year that witnessed negative returns to the tune of 30 per cent.

Drawing a parallel, Thomas said this is quite similar to the base that was created in FY09 when markets corrected by 40 per cent due to the global financial crisis followed by close to 80 per cent returns for FY10.

Echoing similar views, Ajit Mishra, VP Research, Religare Broking, said: "Markets have truly seen one of the best recoveries in FY'21 led by easing restrictions, strong global cues and government support. However, in terms of returns, we had seen a similar recovery post the global financial crisis in FY'10 (~74%) and FY'04 (~81%). But considering the markets witnessed a sharp fall in a very short duration, this recovery has been remarkable."

Outlook for FY 2021-22

With the financial year ending, investors would now focus on upcoming quarterly results which would kick-start from mid-April.

According to analysts, concerns over the fast-spreading 2nd wave of COVID-19 in India continues to remain and the fear of possible lockdowns will dominate the market sentiment.

"Overall markets are likely to remain in a consolidative mode for some time awaiting fresh positive triggers," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said.

(With PTI inputs)

Read:|Sensex reclaims 50k peak, Nifty above 14,800 level