Markets bid adieu to eventful year on high note

 As the stock market closed on a bullish note on the last day 2010, with a 120.02 point surge in Sensex on Friday, the benchmark index rose by 3,044.28 points for the entire year.

In the process, the total investor wealth, measured in terms of cumulative market capitalisation of all listed companies, rose to Rs 72,96,725.14 crore, from Rs 60,79,000 crore at the end of 2009. During the period, Sensex rose from 17,464.81 points on December 31, 2009 to 20,509.09 points on Friday.

Besides, during the decade ended on Friday, the total investor wealth grew over 10-fold from about Rs 7,00,000 crore at the end of the year 2000. Sensex registered nearly five-fold rise over the 10-year period.

“The barometer of Indian capital markets Sensex has moved up five fold from 4,000 to 20,000 in this decade and the FII investment, which was Rs 6,200 crores in the year 2,000, has surpassed Rs 1,00,000 crore in 2010,” Unicon Securities Vice-President (Research) Madhumita Ghosh said.

Key driving forces

Market experts said the key driving forces behind the market rally this year, when the stocks rose by an average of over 17 per cent, were impressive FII inflows as also the continuing robustness of domestic economy, which inched closer to the 9 per cent annual growth level.  The year also saw the Sensex hitting its record closing level of 21004.96 points on Diwali day, November 5.

However, the record-breaking bull run continued only till Diwali, and consolidation, marked with bouts of sluggishness, was seen on the bourses in the last two months of 2010. It was mostly negative news flow from the global markets that limited the surge on domestic bourses to a modest level of about 15.3 per cent.

Realty counters got badly hammered during the year on the negative news flow, with the sector emerging as the worst performer among the 13 sectoral indices.

Besides, the telecom sector was hit by the 2G spectrum scam and subsequent investigations. Experts said the sector is likely to get a boost only with the successful rollout of 3G services.

Those with negative returns for the year included RIL, Maruti, NTPC, DLF, RCOM and Sail.
Despite all the ups and downs during the year 2010, India’s was among the best performing stock markets in the world. Marketmen said that the global economic revival, which began in 2009 and was confirmed in 2010, is set to continue in the new year and the Sensex is likely to breach 24,000-mark in 2011.

However, they cautioned that pressure in the form of higher inflation and interest rates may act as spoil-sport.