Market & MF Snapshot - FY2020-21
The year gone by – FY21 has been nothing short of a roller coaster ride for Indian equities, which rebounded after the market crash late March 2020 on fears over the economic impact of the Covid-19 pandemic. The year was a painful disaster for humanity but beneficial for global stock markets.
Indices hit four-year lows on March 23, 2020, a day before India locked down to contain the spread of Covid-19. The S&P BSE Sensex and Nifty50 closed at 25,981 and 7,610, respectively (March 23, 2020) after crashing 33% in just 13 trading sessions.
Recovery has been swift since then. Stimulus measures announced by the government and the central bank helped markets to limit the fall and then to rebound.
Indian equity markets posted their best performance in a decade in FY21. After ending 26% lower in FY20, the benchmarks made an unprecedented comeback in FY21. FY21 has been the best year for the Indian markets since the financial year 2009-10. The stimulus and expected recovery in the economic activity contributed to the stellar rally in FY21.
The S&P BSE Sensex and Nifty50 closed at 49,509 and 14,691 levels as on March 31, 2021 - rising by 68% and 71%, respectively, over FY21 on the back of strong foreign portfolio investment inflows of Rs 2.6 lakh crore. In absolute terms, Sensex gained over 20,000 points and Nifty 6,100 points.
The upmove in FY21 has been more broad-based and not restricted only to a few big stocks. After underperforming for two years, broader markets not only participated in the rally but even outperformed the benchmarks.
The gains in mid-and small-caps have been sharper with both the indices rallying 91% and 115%, respectively on the BSE.
Among sectors, the metal index gained 144% in FY21. While Automobile, information technology (IT) also logged stellar gains and doubled, real estate, capital goods, power, Nifty Bank and healthcare indices also outperformed and gained between 70% and 94% in FY21.
The rally has been partly on account of strong foreign inflows on expectation of improvement in the economy. Accommodative monetary policies of global central banks, especially the US, ensured emerging markets, including India, remained flushed with funds all through the year.
Further, investors are always advisable to consult their financial and tax advisors to understand the suitability of the product and different options available, before making investments.
FPIs & FDIs
For the current financial year, foreign investors have poured in $35.22 billion, the biggest inflow since 2014-15. India has attracted the highest-ever foreign direct investment (FDI) inflows at $67.54 billion during the first nine months of the financial year 2020-21.
MF Data: - (till February 2021 end)
• Monthly SIP book of Rs 8,340 cr in FY20 against Rs 7,900 cr in FY21
• Monthly average of new SIP registration has increased from 9.8 lakhs in FY20 to 11.1 lakhs in FY21. Total new SIP registration increased from 117.9 lakhs SIP in FY20 to 124.6 lakhs SIP in FY21
• Overall AUM of the industry has increased from Rs 22.26 lakh cr in Mar-20 to 31.86 lakhs cr in Feb-21, up 42% YoY. Growth is mainly on account of increase in market movement of equity and large chunk of flows in ETF/ Index funds and debt funds. Till YTD feb21, debt net inflows amounts to ₹ 257500 cr against net outflows of Rs 32,503 cr in FY20
• Index/ ETF category AUM has increased from ~1.8 lakh cr to 3.40 lakh cr in Feb-21
• Despite pandemic hit year, industry added incremental 60 lakh folios in FY21
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