It is rare that the stock markets post a strong show for two consecutive years, especially the performance shown in 2020 and 2021, Zee Business Managing Editor Anil Singhvi said. He said that 2020 was an exceptional year, where the markets rose significantly after witnessing a steep fall. The performance continued in 2021 even stronger. 

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But, the biggest thing to have happened for the stock markets and for the first time was the strength shown by domestic investors and the money raised through them. In just one and half years, India has added almost 4 crore Demat accounts against the same number of accounts added since 1875 and prior to this period, Singhvi said. What India achieved in almost 150 years, it has achieved in 1.5 years, he further said.  

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The people have realized the potential of stock markets and there is greater financial literacy now, the Managing Editor said. 

The market movement has been unprecedented during this period and people have been able to make money from all segments, including mid-cap and small-cap stocks and not just Nifty50, Singhvi said. Broader markets and indices have moved in tandem. While people have not just made money, but have also been able to make exits. 

The action from the primary markets has been great on the back of quality Initial Public Offerings (IPOs), he said. Investors have lapped the new-age IPOs pulled by the business model and not just the profitability aspect. As many as 63 IPOs were launched this year and over Rs 1.3 lakh crore were raised through the primary markets. 

The Managing Editor spoke on various issues that will impact market movement in 2022. Here is the list: 

  1. Covid-19 – Singhvi said that it will become a part and parcel of life. New variants will continue to come.  From the standpoint of stock markets, the fear factor is receding now, he added. Investors must not worry but only be vigilant. 
  2. US Fed action – It is unlikely that the US Federal Reserve will increase the tapering process any further. It is also unlikely that it will increase interest rates more than three times. So, all this is known. The only determinant is the Foreign Institutional Investors (FIIs). The seasonal ones have already left and the remaining ones are expected to stay put.   
  3. India is the biggest hotspots among the emerging markets and FIIs will have to put money here, Singhvi said adding that the action will likely continue in 2022. 
  4. Easy Money – 2022 will test the patience of the investors and also which stocks they choose. New investors will be tested this year. 
  5. Earnings Results – Inflation could be a risk for a company’s earnings, especially if the Reserve Bank of India (RBI) increases its interest rates. In commodities, the pricewise super-cycle has more or less ended unless something major happens, especially in China. Meanwhile, it is quite likely that we are in the timewise bull markets and which is expected to last for 3-5 years. Commodity stock will give returns, however not a one-way swift action.  
  6. IPOs – This year is expected to see high action in primary markets especially from the much-awaited LIC IPO. 
  7. Disinvestment -   It will be interesting to see how the disinvestment process in companies like BPCL, Concor, BEML and Shipping Corporation of India go about. At least clarity will be needed. After Air India, Government will be aggressive and could even give deal sweeteners. 
  8. Budget 2022 – The budget could be a game-changer if it stresses growth without bothering too much about fiscal deficits.  
  9. Market Levels – 16,200 in Nifty50 will be crucial and any significant bearish trends will start only below this level.  There is a strong support zone for Nifty50 between 16000-16400 for 2022. Bullish trends will come back if the Nifty50 breaches 17,600 upwards. The upper targets are between 18200-18,600. Profit booking is expected at these levels. 
  10. New investors must be cautious and stay for long periods in good stocks. Mid-cap and small-cap stocks will give high returns. Buy on dips is recommended in real estate and textiles. Capital Goods and Mid cap IT shares will also give opportunities. 

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Markets will offer opportunities for correction, Singhvi said as his top mantra for investors.