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HomeMoneyStock Market: Record performance of stock market, investors' wealth increased by Rs...

Stock Market: Record performance of stock market, investors’ wealth increased by Rs 72 lakh crore this year

New Delhi
Share Return: The spectacular move of the stock market in the year 2021 has given a spectacular return of Rs 72 lakh crore to the investors investing in the stock market of India. The total valuation of the listed shares increased by Rs 72 lakh crore to about Rs 260 lakh crore Is.

Amidst the risks associated with the Covid-19 epidemic, the Indian stock market broke all previous records in the year 2021, giving great returns. The huge cash release by global central banks, as well as helpful domestic policies and the world’s largest vaccination campaign, contributed significantly to this.

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On the other hand, concerns were also raised about the steep hike in valuations of several companies. The broader economy was caught between a revival and a downtrend but stock market indices only continued to climb upwards. BSE Sensex made history by crossing 50,000 mark for the first time this year and also crossed 60,000 level within next seven months. The index had closed at its all-time high of 61,765.59 on October 18.

Weakness in Sensex

However, after this, the Sensex declined due to fears of the threat of the new form of coronavirus, Omicron. Despite this, the index has given investors returns of around 20 per cent this year.

world’s most expensive market

The Sensex is also the most expensive of the world’s major markets with a price-earnings ratio of 27.11. This means investors are paying Rs 27.11 for every rupee of future earnings to Sensex companies, as against the last 20 years average of 19.80. However, the Indian market is not the only market to see such enthusiasm.

cash flow effect

Since the start of the pandemic, global central banks, led by the US Federal Reserve, have pumped trillions of dollars into financial markets to boost liquidity and spur growth. The Federal Reserve has been buying bonds worth US$120 billion every month for the past year and a half, nearly doubling its ledger to US$8,300 billion.

big supply bottleneck

Nitin Raheja, executive director of Julius Beer, said the year began on a wave of optimism with the launch of the vaccination program and rapid revival of the economy. However, the latter also faced challenges such as the intensity of the second wave, inflation and supply chain disruptions.

Real estate sector reforms

The market rally was driven by lower interest rates, new generation reforms, adequate availability of capital and revival of the real estate sector, he added. Despite this rally, there is a lesson that valuations and fundamental strength matter and this was reflected in Paytm’s IPO.

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