Benchmark indices end FY21 with a gain of 70%, most since 2009-10

The benchmark indices ended FY21 with a gain of 70%, most since 2009-10 when they had bounced off from the global financial crisis. The rebound, both in FY10 and FY21, followed a painful period for the market and has been underp­inned by aggressive stimulus measures by global central banks.

In FY20, the markets had posted their biggest yearly loss since FY09. In FY21, the BSE MidCap and SmallCap indices rose 91 per cent and 115 per cent, respectively. India’s m-cap rose Rs 91 trillion during the year to Rs 204 trillion. Pundits expect returns in FY22 to be muted.

The resurgence in Covid-19 cases has raised doubts over the pace of the economic recovery and earnings trajectory. Stocks continue to be valued richly even on lofty earnings expectations for FY22 and FY23. Also, the rise in US bond yields is expe­cted to take some shine off the equity markets.