Statsguru: Sensex recovers from Covid-19 pandemic shock in Samvat 2076

Samvat 2076 ended last week on a high note. It not just managed to cover the short-term losses towards the end but also recovered fully from the Covid-19 bloodbath. As against the pre-Covid peak of 41,945 that the S&P BSE Sensex attained in January 2020, the Hindu accounting year ended 3.6 per cent up at 43,443 points.

From the 2019 Mahurat till Friday, the stock market gave strong positive returns at 11.2 per cent, shows chart 1. This was quite high compared to the 5.8-6.5 per cent yield range of long-term government securities, but pale in front of 31.5 per cent appreciation in gold price over the same period. Four Samvats among the last 10 gave higher returns than Samvat 2076. 

However, India’s gross domestic product (GDP) has not grown as much as the stock market. A decade ago (Samvat 2067), S&P BSE stocks commanded a market capitalisation of Rs 60.9 trillion, which was 75 per cent of India’s nominal GDP (2011-12). Today, the market cap would be around 92 per cent of GDP, assuming the nominal GDP stays at the last year’s level (chart 2).

Among the stocks listed on the BSE, it was small-caps that rose the fastest among stock classes, at 18.9 per cent in Samvat 2076. They were followed by large caps at 11.2 per cent, shows chart 3. Mid cap stocks put together returned 10.7 per cent. Small caps listed on the NSE, on the other hand, returned only 7.9 per cent, as the small cap universe differs substantially on the two exchanges.

There were only a few stocks — such as Infosys, Reliance Industries and HDFC Bank — that pushed up the Sensex. Public sector banks, some private banks, and core sector companies adversely affected the index last Samvat, reveals chart 4. ITC, one of the most debated stocks, was the top loser.  

Among the various sectors represented by S&P BSE listed companies, healthcare stocks were the best performers, as expected in a pandemic. Businesses that come into play when human contact needs to be at the minimum, such as IT and telecom, have also done well, shows chart 5. Infrastructure, investment goods, and power companies gave negative returns in Samvat 2076.

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Source: BS Research Bureau, Capitaline, Bombay Stock Exchange, National Stock Exchange