Indian share market benchmarks BSE Sensex and Nifty 50 delivered a stellar performance in the calendar year 2020, mirroring the global equity markets. Following a fall of nearly 40 per cent during February-March 2020, the headline indices recouped all losses and are now ruling at record high levels. From the March low of 25,639, the 30-share Sensex climbed to an all-time high of 47,897 points. While Nifty 50 scaled a record high of 14,024.85, rallying nearly double from the COVID low of 7,511 in March. Nifty took 26 trading sessions to climb to 14,000 from 13,000 points; earlier, it took 32 sessions to reach 13,000 from 12,000 points.
Gaurav Garg, Head of Research, CapitalVia Global Research Ltd, expects a double-digit rally in the Nifty 50 index by the end of the new year 2021. “On the back of increased retail participation, favorable policies by the government, demand resumption and fresh foreign inflows, Nifty may see a double digit rally by the end of 2021,” Garg told Financial Express Online.
All eyes on Union Budget, corporate earning
Market analysts believe that calendar year 2021 will be marked with hopes of early roll-out of the COVID-19 vaccine, normalisation of activities and unperturbed growth recovery. Market participants will track the vaccine roll-out and corporate earnings in the first month and Union Budget 2021 in February. Jaideep Hansraj, MD & CEO, Kotak Securities, sees markets behaving differently in the first and second half of year 2021. “We can expect Nifty to go anywhere between 14,000 and 15,000 range sometime in the first quarter of CY21,” Hansraj said. He further said that the fourth-quarter earnings season may push markets into some kind of consolidation phase post Union Budget 2021 presentation, and there may be time correction.
Nifty may end at 13,500, Sensex at 46k in CY21
Hansraj said that moderation in monetary policies and rising yields scenario in 2HCY21, may lead to mean reversion of valuations towards 10/15 year averages. “We expect Nifty-50 to end CY21 somewhere at 13,500 and BSE Sensex to end at 46,000,” he said. While B Gopkumar, MD & CEO, Axis Securities believes calendar year 2021 to be a year of growth. He sees markets to deliver robust returns in 2021 on the back of near double-digit GDP growth expectations in 2021 and over 30 per cent earnings growth for India Inc. Gopkumar also expects Union Budget 2021 could be a blockbuster.
Markets across the world have witnessed a dream rally during the COVID-19 pandemic. According to an analyst, positive news triggers on the vaccine development front along with trillion dollars of funds pumped into the financial system to support the global economy, have given a boost to the markets. “Going forward in 2021, the momentum is expected to continue but would be a stock-specific play. Also, the risk-reward ratio needs to be borne in mind as we could witness high volatility in 2021,” Aamar Deo Singh, Head, Advisory at Angel Broking.