Stock market FY10 returns highest in 5 years

Investors have reaped a five-year best return of over 80 per cent from the stock markets in fiscal 2009-10, when judged by the performance of the BSE benchmark index Sensex.

Analysts, however, said that the momentum could be slowed in the coming fiscal as investors are expecting a lot from the market now, which may not come in until there is a correction. The bulls were back with a bang in fiscal FY'10, offsetting the losses incurred by investors in the previous financial year.

The returns from investments in this fiscal have soared to 80.5 per cent. The Bombay Stock Exchange benchmark Sensex settled at 17,527.77 points on March 31, 2010, from 9,708.5 points at the end of March 31, 2009.

The Sensex had jumped to its two-year high level of 17,793 points on March 29 driven by strengthening of the rupee against the US dollar. During FY'09, the 30-share index had plunged to 9,708.50 points from 15,644.44 points, losing nearly 38 per cent.

"The market has gained quite a lot and will continue to remain volatile in the coming days. Monsoon will be a deciding factor for the overall growth of the economy and that would in turn affect the capital market," Taurus Mutual Fund Managing Director RK Gupta said.

During fiscal 2007-08, the market provided a return of 20 per cent, while the same for 2006-07 and 2005-06 was 16 per cent and 74 per cent, respectively.

The fiscal has been a good one for the broader market with a host of new companies coming out with public offerings and three state run companies — NTPC, REC and NMDC — coming out with follow-on-offers.

Among the biggest gainers in the Sensex companies Tata Motors surged over 300 per cent, followed by Hindalco 240 per cent, Tata Steel 210 per cent, TCS 200 per cent and Wipro 190 per cent in financial year ending March 31, 2010.

Other major gainers include ICICI Bank 180 per cent, M&M 175 per cent and the index heavy-weight Reliance Industries 44 per cent. "Returns have been widespread for the market but the coming financial year will not be too rosy. We are cautiously bullish on the market as a lot of expectations have been built up," SMC Global Vice-President Rajesh Jain said.

Analysts said at this juncture a correction is imminent in the market and the Sensex could trail the 20,000 level by the end of next fiscal (2010-11).

"FIIs may withdraw money if the rupee strengthens at this pace. It will pour in money again after the rupee comes back to the 47-a-dollar mark," Gupta said. The Indian rupee is currently hovering around the 44.97-a-dollar mark, at nearly 19-month high level.