(^_^) Today my Tuesday posts complete 4 years.
Non-stop for 4 years, week after week, I have been writing on topics ranging from film reviews to economy to sports to religion to spirituality and many more. The journey is non-stop and will continue. Today, am going to talk about markets. The Indian stock market has seen the most volatile movement in its history as the India VIX went to 83.61 in March 2020. This year has been inhuman for humans. Pandemic has hit the economies like never before as countries across the world have seen a contraction in their GDP growth rate.
Not just that, there was pain all of early 2020 as mankind was fighting out to get rid-off Covid19. Countries blocked the boundaries and stopped allowing foreign people. Europe saw a huge loss in the economy due to the unprecedented hit to the tourism sector. Standing in early 2019, if a country stops foreigners from entering their country, we would be laughing at them. But in April 2020, we will be surprised if a country doesn’t do that. Things change briskly and none of us can imagine what’s there in the store for us.
While early 2020 was filled with dangerous news on Covid and unbearable pain it inflicted. There is a sense of hope and excitement in the people as we drew close to the year. The vaccine news brought joy to the people and that people make the market. Once again, after hitting 7,600 levels in March 2020, one can never think of close to 14,000 on Nifty by end of the year. Believe it or not, this is the story of the day. Nifty is 70 points away from a new all-time high and the milestone of 14,000.
For a moment let’s look at this decade’s performance of the Nifty before analysing 2020.
On January 1st 2011, Nifty was trading at 5,691 and today on 29th December 2020, Nifty is at 13,932. This is unbelievable 144% returns in 10 years. Remember the early years weren’t great for Nifty, only from 2014 once BJP got elected with full majority, the Stock market started moving up rapidly on the back of a stable government. For the year 2020, Nifty went by 14% and that’s the best returns you can get.
Let us look at the Sectoral Indices performance for the year 2020: 1st Jan 2020 to Dec 28th 2020 in NSE
- Pharma – 60%
- IT – 54%
- Metal – 15%
- FMCG – 13.5%
- Auto – 8%
- Bank – (-)4%
Reasons for the domination of a few sectors…
Pharma and IT were the dominating stocks for the year and that’s as expected too. The pharma companies were topping the stock charts due to the pandemic. The vaccine is expected to add one-tenth of additional revenue to pharma companies. Some due to production and many due to the distribution.
On the other hand, IT companies made huge money. This was on the back of a sharp increase in online services. While this was the brighter side of the markets, the dark side was for the auto and banking stocks. The moratorium and the lockdown had badly hit the sales of automobiles. The lockdown resulted in complete fall in the sales of giant companies like Maruti and Tata. Valuations wise, TATA Motors is overvalued at 183.5₹ and that’s not a good sign at all. Last two months have been very anticipative.
Nifty50 is continuously and consistently seeing an upward movement. There’s no stopping Nifty especially after successful vaccine roll out in UK, USA and part of Europe. This is even after the new strain of Coronavirus getting discovered in the UK and Europe. All in all, the markets are in bullish mode and that’s exactly when you need to turn cautious. Having said that, investments in stock markets have never been riskier. Look at the chart of Nifty50 and you can understand yourself that the stock market is always rising investment opportunity. All you need to do is to make the right investments and the best options are always found in Nifty50.
Let’s now look at the best-performing stocks in 2020:
- Asian Paints – 50%
- JSW Steel – 44%
- Reliance – 34%
- Tata Steel – 34%
- Granules – 198%
- Mindtree – 100%
- Cadila Health – 97%
- Apollo Hosp – 66%
And the list goes on….
This has been an unprecedented year. Frankly, none of the market experts had expected nifty50 to hit the low levels of 7,600. Once Nifty did that, nobody predicted Nifty to rise by 6,500 points to near 14,000. This is an interesting part of the stock markets. The new decade will start on January 1st 2021, the year 2021 might not be as bullish as 2020 but the next 9 years will be outstanding. Indian stock markets will be in the top three stock markets in market capitalisation. Currently Indian Stock market, BSE & NSE are at 9th and 10th places. So, to move from 9th place to 3rd place will mean Indian stock markets will see a sea of change and the trading volumes see unmatched and uncommon growth… I am sure you wouldn’t want to miss that beautiful and rewarding journey…
Choose wise, invest nice and turn your money into wealth!