Nifty50 climbed Mount 14,000 on the last day of the calendar year 2020. The index has gained 86 percent after hitting more than four-year low of 7,511 on March 24. Year-to-date, the 50-share index is up around 15 percent.
Investors' wealth increased by more than Rs 86 lakh crore from March lows, with the BSE market capitalisation rising to over Rs 188 lakh crore.
The strong comeback was on the back of sustained FII inflow, fiscal support provided by both the government and RBI, progress on the vaccine front, a consistent decline in COVID-19 cases locally, improving economic data points and rising hope for strong earnings growth in the coming year.
The Nifty50 touched a fresh record high of 14,010.15 on December 31 with the participation from all 50 stocks, while the Sensex' record high was at 47,865.56.
"2020 was indeed a fascinating year, and Nifty is on track to deliver double-digit returns. Notably, we are on track to end CY2020 as the fourth year in a row with positive returns. Meanwhile, economic indicators and earnings have started to turn around and the rally has broadened in the last few weeks. Also, liquidity remains strong. All of these point to a strong start of the year 2021," Unmesh Sharma, Head of Institutional Equities at HDFC Securities told Moneycontrol.
Majority of stocks (490) in the Nifty500 index are trading above their respective March lows. And about 201 stocks more than doubled in the nine-month period.
Adani Green Energy, Aarti Drugs, Laurus Labs, Birlasoft, Adani Gas, Jindal Stainless (Hisar), Dixon Technologies, APL Apollo Tubes, Adani Enterprises, Affle (India), Tata Elxsi, IndiaMART InterMESH, Welspun India, SAIL, Advanced Enzyme Technologies, Granules India, SpiceJet, JSPL, Trident, IndusInd Bank, Motherson Sumi Systems, Aurobindo Pharma, CDSL and Sobha, among others, gained 169-645 percent.
Moreover, 17 stocks delivered multibagger returns from the Nifty50 pack.
Tata Motors, Hindalco Industries, JSW Steel, IndusInd Bank, M&M, Infosys, Tata Steel, Bajaj Finance, Adani Ports and Special Economic Zone, Reliance Industries, Wipro, HCL Technologies, Cipla, Grasim Industries, Divis Laboratories, Axis Bank and Tech Mahindra rallied 106-168 percent.
The recovery from March lows was seen across sectors with Nifty IT and Metal indices rising more than 115 percent, while Auto, Bank, Infra, Energy, Pharma and Realty indices were up 70-99 percent. FMCG (up 48 percent) and PSE, as well as PSU Bank, gained around 38 percent each.
The so-called defensive plays- IT and Pharma stocks- led the rally in the beginning till August. After September, other sectors joined in, while it was only from November that the banking names joined the bandwagon.
The broader markets after initial underperformance gathered steam and outperformed benchmark indices, as the Nifty Midcap100 index was up 89 percent and Smallcap rallied 110 percent.
After an eventful 2020, the year 2021 is expected to be strong as normalcy is expected to return in both economy and corporate earnings, though there could be a correction in initial months of next year due to sharpy rally seen in the second half of CY 2020, experts feel.
"With the worst of asset quality concerns behind us amid resolution of big-ticket stressed assets and economic optimism in the post-COVID era, Nifty earnings CAGR is impressively placed at 22.7 percent in FY21-23. We value the Nifty at 14,400 i.e. 20x P/E on FY23 estimated EPS of Rs 720 with corresponding Sensex target at 50,000," ICICIDirect said.
Unmesh Kulkarni, Managing Director Senior Advisor at Julius Baer India also feels the current bull market is likely to extend to 2021 as the global economies (including India) see normalisation over the next 6-12 months.
"Investors, globally as well as in India, are currently underinvested in equities, not having expected the current market rally to sustain, and with interest rates being at all-time lows, this liquidity is sooner or later going to find its way into risk assets, including equities," he said.
He expects 2021 to present stock-specific opportunities as well as sector/theme rotation opportunities, as the market recovery becomes more broad-based. Cyclicals, for instance, could lead the market performance in 2021, he feels.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.