{"id":1685,"date":"2023-08-21T10:22:46","date_gmt":"2023-08-21T04:52:46","guid":{"rendered":"https:\/\/savart.com\/blog\/?p=1685"},"modified":"2023-08-21T10:22:47","modified_gmt":"2023-08-21T04:52:47","slug":"the-savart-annual-market-wrap-up-2021-2","status":"publish","type":"post","link":"https:\/\/savart.com\/blog\/the-savart-annual-market-wrap-up-2021-2\/","title":{"rendered":"The Savart Annual Market Wrap-up 2021"},"content":{"rendered":"\n

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The Indian benchmark index Nifty 50 outperformed many emerging markets during the year 2021 driven by strong rally in IT and Metal Sectors. Nifty 50 gained close to 23% during 2021 beating other markets such as China, South Korea, Brazil and Australia possibly driven by stronger economic recovery, supportive monetary policy, and faster vaccination across the country.<\/p>\n\n\n\n

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However,\u00a0the Indian equity market observed uneven bullish sentiment across sectors. The benchmark Nifty 50 gained close to 23%,\u00a0but sectors like metal and IT generated\u00a0higher\u00a0returns\u00a0(exceeding\u00a050%).<\/p>\n\n\n\n

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Nifty Metal gained close to 70%\u00a0during 2021 beating rest of the sectors. The commodity market gained significantly during the year on account of faster than anticipated demand recovery and supply chain bottlenecks.\u00a0Consequently,\u00a0the\u00a0demand-supply mismatch has contributed to the rise in\u00a0prices of\u00a0commodities such as ferrous and non-ferrous metals. This has boosted the realisation of Indian metal companies and further enabled the companies to reduce the debt\u00a0from\u00a0their balance sheet.<\/p>\n\n\n\n

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Nifty IT became the second highest return generating sector during 2021. As the world was hit by Covid-19, digital\u00a0adoption\u00a0accelerated\u00a0for both the consumers and businesses. Nifty IT gained close to 57% during the year. The rally was largely driven by the paradigm shift within businesses towards digitization and platform services. The order book for IT companies showed solid growth during the year across verticals. However, the sector has also experienced pressure during the year\u00a0due to rise in wages and employee benefit expenses.<\/p>\n\n\n\n

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On the other\u00a0hand,\u00a0sectors like Auto, Pharma, Bank and FMCG have\u00a0significantly underperformed the IT and Metal sectors due to sector specific challenges faced by the industries. Nifty Auto has undergone a lot of turbulence\u00a0because of the demand side challenges faced by the two-wheeler sector post the 2nd wave of Covid-19 and supply side constraints that impacted the passenger vehicle segment adversely led by the chip shortages issue.\u00a0Such challenges\u00a0only allowed\u00a0Nifty Auto\u00a0to\u00a0gain\u00a0~16% during the year. It is also important to note\u00a0the stellar 150%+ return generated\u00a0by Tata Motors\u00a0during 2021, which significantly\u00a0impacts the fortunes of NIFTY Auto.<\/p>\n\n\n\n

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Nifty Pharma has underperformed its peers with a significant gap during the\u00a0year\u00a02021. Nifty Pharma posted close to 6% return during the year. The performance of Indian Pharmaceutical companies depends on the US market. The Indian pharma companies\u00a0faced\u00a0higher competition\u00a0in the US market,\u00a0thus stunting\u00a0the growth of many Indian drug makers.<\/p>\n\n\n\n

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Nifty Bank gained close to\u00a013% during the year. The two\u00a0back-to-back\u00a0pandemic induced lockdowns impacted the Indian banking sector adversely. Though the banks recorded strong growth in advances (loans) during the 2nd half of the year, a lot of stress is still prevailing in restructured loan books of the banks. Consequently, the provisions for the bank\u00a0have gone up and this has been a major sentiment dampener for the banking sector during 2021.<\/p>\n\n\n\n

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Nifty FMCG posted\u00a0a lower\u00a0return during the year\u00a0of\u00a0close to 8%. FMCG companies recorded healthy revenue growth during the year\u00a0due to resilient demand in the\u00a0sector but\u00a0have\u00a0experienced high raw material cost pressure during the last 2\u00a0quarters.\u00a0Thus, the margins (profitability) of the companies have been impacted adversely. Nifty FMCG sector has\u00a0moved lower by\u00a0approximately\u00a011% in last two months due to the high input cost pressure.\u00a0\u00a0While\u00a02021\u00a0witnessed\u00a0uneven return across sectors,\u00a0the investment environment\u00a0of 2022 seems even more\u00a0difficult to ascertain,\u00a0with tightening of financial conditions, rising concerns of Omicron variant, requirement of\u00a0booster doses\u00a0and valuation divergence across sectors.<\/p>\n\n\n\n

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P.S.\u00a0Sectors that outperformed during 2021 might not give similar return during 2022\u00a0as historical performance is not a guarantee of future performance. Savart\u00a0intends to\u00a0invest in businesses that\u00a0are consistent and built to last\u00a0\u2013 Sign up to know more!<\/p>\n\n\n\n

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The Indian benchmark index Nifty 50 outperformed many emerging markets during the year 2021 driven by strong rally in IT and Metal Sectors. Nifty 50 gained close to 23% during 2021 beating other markets such as China, South Korea, Brazil and Australia possibly driven by stronger economic recovery, supportive monetary policy, and faster vaccination across the country. However,\u00a0the Indian equity market observed uneven bullish sentiment across sectors. The benchmark […]<\/p>\n","protected":false},"author":2,"featured_media":2041,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1685","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investments"],"acf":[],"yoast_head":"\nThe Savart Annual Market Wrap-up 2021 - Savart Blogs - Investing Simplified<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/savart.com\/blog\/the-savart-annual-market-wrap-up-2021-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Savart Annual Market Wrap-up 2021 - Savart Blogs - Investing Simplified\" \/>\n<meta property=\"og:description\" content=\"The Indian benchmark index Nifty 50 outperformed many emerging markets during the year 2021 driven by strong rally in IT and Metal Sectors. Nifty 50 gained close to 23% during 2021 beating other markets such as China, South Korea, Brazil and Australia possibly driven by stronger economic recovery, supportive monetary policy, and faster vaccination across the country. 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