If 2020 was a year of tremendous resilience against the raging COVID-19 pandemic, 2021 was about turning an advantage into a position of strength. Although the second wave brought us to our knees, thanks to the accelerating pace of vaccination, the economy opened up sooner, taking small steps at first, then giant steps toward normalization.

Yes, the fear of being caught off guard by an unknown virus variant or an uncontrolled state wave lingers. But markets have learned to live with such risks. For the local stock market and participants who early on predicted that Covid wouldn’t be the real World War II for the human race, the rewards continued to be rich in 2021. Here’s a detailed look at how the year is shaping up for popular local indices, look at the top performing sectors and stocks as well. To the disappointed laggards, and how wealth creation was achieved in the stock market.

The Sensex, a popular market barometer, has refused to wilt and has posted a healthy 21 percent gain this year (through Dec. 16), marking the sixth consecutive calendar year of gravity-defying gains. This is only for beginners. The rally race has been deep this year, with the middle hats and the beanie hats joining the party in an even bigger way. The BSE Midcap Index posted a 41 percent gain, nearly double that of the Sensex Index, and only the third time in a decade that mid-cap companies have outperformed large companies by 100 percent in a calendar year.

For those with the ability to tackle riskier small businesses, returns have been the biggest, with the BSE Smallcap index up nearly 62 percent, nearly 3 times the Sensex index and the second time this has happened in the past two decades.

In 2021, the coin gained “ATH” or all-time highs, as in any other bull market. The big cap-based Sensex has hit ATH as much as 52 times from 239 trading sessions this year so far. This was a broad representation of what was happening below, as arrows of all sizes and shapes found new takers. In basket form, large companies, the 100 largest stocks by market capitalization, have seen 78 percent of them reach all-time highs this year. So, it doesn’t matter if you own RIL, TCS, HDFC Bank, Infosys or SBI; The bulls pushed most of them towards uncharted territory in the stratosphere. Only ITC shareholders will hold a grudge, because ATH, which hit in July 2017, is still a long way off.

In the mid-cap space, from 101 to 250 per mcap, 69 percent of stocks — including Gujarat Gas, Cholamandalam Investment, Page Industries, Balkrishna Industries, HAL and ACC — have been zoomed to all-time highs. Please note that a section of the MSUs has not reconsidered their ATHs.

Floating in lowercase was also something that couldn’t be missed. Nearly 5 out of 10 small companies, such as TTK Prestige, DCM Shriram, Radico Khaitan, Manappuram Finance and Welspun India, have made their highest in life in 2021 and this is quite an achievement given the vastly large universe in this low-liquid bucket of market.

For those investors who invest based on valuation metrics like Price to Earnings (P/E), 2021 threw a mixed bag (see table).

Until then, the popular narrative of Indian bull markets has always been FPI (Foreign Portfolio Investors). But 2021 was different by that measure. In 2020, foreign investment institutions poured in Rs 1.7 crore in equities, with foreign investors reporting net inflows for 10 of the 12 months. In fact, this was the highest streaming FPI in a single calendar year ever!

But the mood for FPI soured significantly in 2021, with around Rs 31,000 crore injected, with 6 of the 12 months seeing net outflows.

You can blame the Fed on tapering, historically high valuations or just locking in profit by the foreign hand. But the resilience shown by local stocks deceived all and diversified. This was made possible due to the massive display of confidence by local investors, both directly and indirectly through institutions. Call it the Atmanirbar Bharat effect! Of course, it remains to be seen how Forums The shield stands against the relentless foreign sale.

In 2021, when foreign investment institutions are sold on the money market, the blow is softened by domestic institutional investors (DIIs). For example, FPIs sold Rs 26,000 crore shares in the cash tranche in December 2021 while DIIs bought over Rs 20,000 crore. In November 2021, when FPIs sold for ₹39,900 crore, DIIs bought ₹30,560 crore.

The latest shareholder data also confirms the same trend. FDI ownership, in value terms, declined by 128 basis points from 22.75 percent in December 2020 to 21.47 percent in September 2021. During the same period, DII ownership declined marginally by 44 basis points from 13.56 percent to 13.12 percent. cent. Meanwhile, the retail investor holding jumped 23 basis points to 7.13 percent from 6.90 percent.

The sharp rise in investor/demat accounts, which is essential for stock trading, also supports the theory of changing market dynamics.

With an average of 24 open accounts per month from January to October 2021, funds from 738 lakh accounts are flowing into stocks with unprecedented enthusiasm amid interest rates in FDs for banks, the primary investment option for families, at historic lows.

According to the number of investors registered on the Bahrain Stock Exchange, the overall national growth in the number of investors in the stock market was around 55 percent, with states such as Assam, Telangana, Madhya Pradesh, Rajasthan, Uttar Pradesh, Chhattisgarh and Odisha showing faster growth than the average. All India. Maharashtra, Gujarat, Uttar Pradesh, Karnataka, Tamil Nadu, West Bengal, Delhi and Andhra Pradesh (see table).

With the world returning to its pre-Covid mood, sectors of the old economy caught the eye in 2021. Otherwise, who would have thought that the energy sector would be the best performing sector this year?

While 2020 saw healthcare and IT emerge as the lifeblood of our Covid-ravaged lives, the best performing sectors/industries in the stock market this year (as of Dec 16) were Energy (up 74 percent), Metals (up ) 69%, basic materials (62%), real estate (58%), capital goods (52%), and infrastructure (48%). Information technology can still generate a 46 percent gain even in 2021, but healthcare (up 15 percent) has been at the lowest levels alongside consumer goods (up 8 percent) and banking (up 16 percent).

Not a single sector/industry index (in BSE) recorded negative returns in 2021, which is a rarity. In recent bullish years, there have always been a few sectors in the market that have not received attention such as Oil & Gas, Banking (2020) and Metals & Automotive (2019).

The energy index was led by massive gains in shares of Adani Transmission, Indian Energy Exchange (IEX), Tata Power and Adani Power. NTPC, KEC International, and NHPC were lagging behind, but each delivered double-digit percentage returns. In the metal package, APL Apollo Tubes, Vedanta and SAIL were some of the most notable artists. Sobha, Mahindra Life Space and Brigade notched gains in Realty space – Phoenix Mills, Sunteck and Godrej Properties ranked last even after posting good gains for 2021 so far. The capital goods sector saw strong performance by stocks from Grindwell Norton, Carborundum Universal and SKF India, while AIA Engineering was lagging.

IT, also a 2020 favorite, saw KPIT Technologies lead, closely followed by Happiest Minds Technologies, Tata Elxsi, Persistent Systems and Mindtree – all of which achieved a minimum 200 percent profit for 2021 alone!

In terms of lagging industry/sector, consumer goods, healthcare, and banking were at the bottom of the rankings. An 8 percent rise in FMCG isn’t bad after posting a 13 percent gain in 2020. While the broad consumer goods space was good, big companies like HUL, ITC, Nestle and Britannia were quiet in 2021 showed Healthcare, the 2020 star, merging this year with big names such as Sun Pharma, Davis and Apollo Hospitals well while Dr. Reddy, Biocon and Lupine have been a forgotten year. Banking was a mixed bag, with ICICI Bank and SBI doing well but the likes of HDFC Bank, Kotak Mahindra and IndusInd quiet.

If you look at the BSE Allcap index which has about 1,060 shares, the wealth of investors has increased by more than Rs 65 crore or 35 per cent in 2021. As many as 87 of the top 100 stocks, in mcap terms, have posted positive returns. The rest 13 are down by as much as 20 percent. The wealth gain of investors in large corporations amounted to Rs 44 crore. Top-performing large-cap stocks — Adani Total Gas, JSW Energy, Adani Transmission and Adani Enterprises — rose between 200 and 400 percent. Retirees include Hero Motocorp, HDFC AMC, Dr Reddy’s Labs, ICICI Lombard and Kotak Mahindra Bank.

In the booming mid-cap space, the gains were even greater even though the share of gainers (126 out of 150 or 84 percent) was similar to that of the big-cap stocks. The company was Brightcom Group and Tata Teleservices Mah. And Trident is the best performing company on this list of 150 stocks. Among the worst performers in the field are Pandhan Bank (down 34 percent), YES Bank (down 30 percent) and Aurobindo Pharma (down 24 percent). Investor wealth gains added across the median caps in 2021 amounted to INR 12.5 crore.

Small companies make up the largest basket in BSE Allcap, with more than 800 shares, and about 85 per cent posted gains in 2021. The addition of investor wealth in small companies was around INR 9 crore this year. Given that small companies are the riskiest in terms of the cap spectrum, the number of shares that have doubled since 2020 has reached more than 200. Among the top performers are GRM Overseas (over 1,400 percent), Ratan Enterprises India (over 700 percent). ), and daytime spinning (more than 500 percent). Small stocks that destroyed investor wealth in 2021 include Ujjivan SFB and Ujjivan Financial Services (down 50 percent each).

With 2021 a great year overall in terms of returns, newly listed stocks (listed in one year through December 2020) are doing well. Of the 14 newly listed stocks on the BSE motherboard, 9 beat Sensex’s gains in 2021. The top performers were Happiest Minds, Angel One, UTI AMC, Route Mobile and Equitas SFB.

Penny stocks, priced under Rs 10, are popular among some retail investors even though they are very illiquid counters with often weak fundamentals.

Of the 600p shares (priced under $10 at the end of 2020), about 540 or 90 percent have given positive returns in 2021. The top gainers on this are up at least 2,000 percent, including Adinath Textiles and Radhe Developers The Digjam, The Chennai Rail. Note that cash stocks such as Sagar Productions, Trio Mercantile, BC Power, Chandrima Mercantiles and Ishaan Infrastructure have lost 40-60 percent of their value in 2021 so far. This should serve as a cautionary tale for investors willing to bet on lesser-known names.

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