This annual dip in FPI inflows, however, isn’t worrisome if you look at it on a monthly basis. The steep market fall of March was adequately mirrored in the FPI numbers, as the monthly outflows in equity and debt crossed $8.35 billion (₹61,973 crore) and $8.13 billion (₹60,376 crore), respectively. FPI inflows in equities saw a strong comeback in the last three months of the year at $18.41 billion (₹1.42 lakh crore) as October, November, and December saw monthly inflows of $2.66 billion (₹19,541 crore), $8.13 billion (₹60,358 crore), and $7.62 billion (₹62,016 crore), respectively.

Clearly, 2020 was a year when most predictions for it, made in December 2019, literally went for a toss. “SarsCoV-2 (Covid-19) virus put most, if not all, of these annual predictions to waste,” says Anoop Bhaskar, head of equity at IDFC Mutual Fund. To predict what would happen in the new year, Bhaskar says that one needs to make the key assumption: that the pandemic will not come with any new twist and the roll-out of the vaccination programmes across the world will lead to ‘normalisation’. “Though the new ‘normal’ could be vastly different from the ‘normal’ of 2019, when, few, if any had imagined the havoc such a virus would cause,” Bhaskar adds.

He has company in Jaideep Hansraj, MD & CEO, Kotak Securities, as Hansraj, too, concurs when he argues that 2021 will be marked with hopes of an early roll-out of the Covid-19 vaccine, normalisation of activities, and unperturbed growth recovery. “We expect 2021/FY22 to be a better year with likely strong recovery in both the economy and earnings,” Hansraj says.

Foreseeing the Nifty and Sensex hovering at the respective levels of around 13,500 and 46,000 at the end of 2021, Hansraj predicts that the markets would behave differently in the first half and the second half of 2021. Backed by possibly stronger corporate earnings in the third quarter (ended December 2020), Hansraj expects the Nifty to sail between 14,000 and 15,000. And following the Union budget of 2021 and corporate results for Q4 (ending March 2021), the market could go into a consolidation phase and witness correction.

For 2021, IDFC Mutual Fund’s Bhaskar expects the market movement to be shorter and sharper. In other words, he believes the markets will be deeper on the way down, but overshoot on the way up, a stark contrast to its much more docile nature that was witnessed throughout the 1990s. “The fall during March 2020 lasted less than 35 trading days, erasing between 36% and 43% across the indices—Large, Mid and Small Caps,” he explains.

For now, however, the benchmark indices seem to be deeply engrossed in hitting new life–highs, as January 1 saw the Sensex scale up to 47,980.36 points—an increase of over 87% with addition of over 22,341 points in 195 trading sessions since the low–point of 25,638.9 on March 24. Clearly, as far as the markets are concerned, 2021 has already come loaded with its own platter of excitement.

S&P BSE PSU

FY21: A bumper fiscal for the bourses

Markets 2020: A volatile year of lows and highs