The Indian stock market capitalization reached a new milestone on May 21, 2021 as it touched the $3 trillion mark. We are the 8th country in the world which has reached this mark and it tells a lot about the Indian markets. But the point that it drives home the most is “Resilience”.
Markets -The Indian equity markets whether direct or through the mutual fund route are becoming a preferred investment avenue for a steadily growing segment of investors. Despite the volatility and uncertainty because of the pandemic, the markets are exhibiting resilience.
As the S&P BSE Sensex hovering around 52,000 levels, the trend of growing investments into the large-cap companies is now coupled with increased participation in mid and small-cap segments. The growth in the capital markets is much more broad-based than it was a year back, which means that the markets are not such driven by a handful of stocks but a growing number of companies from the mid-cap and small-cap segments also. There are multiple sectors that are showing growth like IT, Pharma, Metals, Banking which is aiding the markets too. We are finding businesses growing because of opportunities created by the pandemic or where businesses have re-invented themselves and kept up with their profitability.
Businesses - The second wave has left the country battered with the loss of human lives. As we see cities and states get ready to open up businesses again, caution and wisdom will play a big role. But what is already being seen is the resilience of the Indian. Businesses that could operate from home, were better prepared in the second wave as those businesses carried on at productive levels despite the lockdown. Sectors like healthcare and pharma continue to remain in the focus, as the times have not only increased demand but the shortages have pivoted all to focus on planning and capacity building. The markets have again shown the resilience as they did last year and attracting more and more investors - domestic and foreign. Ecommerce, cloud kitchens, digital banking are also signs of resilience from businesses big and small business who have re-invented themselves to stay relevant.
Individuals - I saw the local Kirana store which was allowed to keep their shutters open till 11 am, utilize the rest of the time of the day doing home deliveries. I saw the help and support staff around our homes volunteer for tests and vaccines to ensure that they are able to do their daily jobs. We have seen gram panchayats doing vaccination initiatives to get their villages immunized. These are examples of the common Indian who exhibits resilience despite the circumstances and the individual as a collective is a big pie of the economy.
Investor - Infections are reducing and cities are opening up, but the uncertainty will continue for some more time to come. There are also some deeply impacted sectors and businesses that will take time to get back to business as usual. But to investors, we will reiterate that staying invested, investing regularly and as per your financial goal and risk appetite as the fundamental ground rules of personal investments. Keep your eye on your financial goal, refrain from timing the markets for it is the resilience and patience of the investors also that has ensured that the markets have crossed the milestones that they have and continue to grow.
Stay safe. Stay Invested.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.