Sensex, Nifty In 2021: A Year Of Milestones For India's Stock Market
Record highs, milestones, retail frenzy and the threat of rapid monetary tightening shaped the stock markets in 2021.
New strains of Covid-19, vaccination coverage, the U.S. Federal Reserve's timeline for tapering monetary stimulus, inflation, work-from-home, and retail investor frenzy shaped the equity markets in 2021.
India's stock benchmarks were the top performers among global peers as they scaled new records. That rubbed off on the primary market with Indian companies raising a record amount via initial public offerings. The markets, however, ended the year volatile, having retreated from their October peak.
All the nine sectoral indices on the NSE rose in 2021. The NSE Nifty Metal Index rose the most followed by Nifty IT Index and Nifty Realty Index. Bank, FMCG and pharma indices gained the least, but those gains were also at least 10%, as in the case if Nifty FMCG.
16 mid-cap stocks at least doubled compared with 10 in 2020.
No mid-cap stock dropped more than 50%, just as the case was in 2020. One midcap went very close, though, to shed 50%. That's Dhani Services Ltd., the company which provides consumer business with digital healthcare and transactional finance offerings, that fell as much as 48.52% in 2021. Overall, 22 stocks in the Midcap Index declined in 2021, while 78 rose.
Nifty Metal led sectoral gains, rising nearly 70% in the best performance since 2009.
All the 15 constituents of the Nifty Metal Index advanced, with five gaining over 100%.
Nifty Pharma was the worst performing sector in 2021, but ended with a second straight year of gains.
The Nifty IT Index rose over 58% in its best performance in 12 years as work-from-home became a norm.
2021 was also a record year for initial public offerings with 55 issues raising over Rs 1.06 lakh crore, till Dec. 15. New-age businesses like Paytm (One97 Communications Ltd.), Nykaa (FSN E-Commerce Ventures Ltd.), and Zomato Ltd. made their market debut.
While foreign inflows drove the markets higher till February, domestic institutional investors came to the rescue after the second wave of Covid-19. With concerns over faster withdrawal of monetary stimulus and the Omicron strain, the DIIs kept the markets afloat, undeterred by the FII outflows.
Of the Nifty 50 stocks, Tata Motors Ltd. was the top gainer this year by a significant margin as it rose over 160%, followed by Hindalco Industries Ltd. (nearly 100%), Tech Mahindra Ltd., Wipro Ltd. and Bajaj Finserv Ltd.
Hero MotoCorp Ltd. declined over 20% the most in 2021, at least twice more than the second on the list - Kotak Mahindra Bank Ltd. Dr. Reddy's Laboratories Ltd., Bajaj Auto Ltd. and HDFC Life Insurance Co were among the top losers.
India's stock benchmarks were among the top performers among the global markets in 2021.
Updates an earlier version with Dec. 31 closing prices.