In 2020, we saw how Nifty50 went on a roller-coaster ride—making a low of 7,511 in the month of March, to reaching an all-time high of 14,024 by the year-end. 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 government announced the Union Budget on February 1, 2020, as the coronavirus panic led to a Sensex fall by two per cent. Later, as the WHO announced the coronavirus as a pandemic, on February 28, 2020, the Nifty and the Sensex witnessed the worst weekly fall since 2009.
Let us go through the timeline of 2020 events which affected the price movements of the Indian stock markets. Performance of Indian stock market in 2020:
1. In the beginning of January, Nifty50 touched an all-time high at the 12,400.
2. On January 27, the first case of COVID-19 was reported in India.
3. On February 1, 2020, the Union Budget was announced and the market fell in the next session by 250 points.
4. On March 6, we saw the biggest one day fall in obsolete terms, when Nifty fell by 868 points amid global selling.
5. Nifty ended 431.55 points down at 11.201, and thus made the worst weekly fall for Nifty since 2009.
6. On March 24, the 21-day lockdown was declared.
7. On March 25, a big recovery came in the market as Nifty surged 708 points.
8. 1,000 cases were registered in India by mid-April.
9. On May 19, cases in India crossed the 1 lakh mark.
10. Economic stimulus worth 20 lakh crores was announced, along with a push for Make in India.
11. At the end of May, India and China border tensions escalated.
12. At the beginning of August, gold touched an all-time high of 57,000, as interest continued in safe havens.
13. India’s GDP contracted.
14. 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.
15. 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.
What to expect from the Indian stock market in the year 2021
It is expected that in the year 2021, the Indian economy would return to normalcy. 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 we can 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.
The author is managing director of StockEdge