Performance of Indian Capital Markets in 2020

This article is reprinted from the Indexology blog of S&P Dow Jones Indices.

Indian capital markets had an exceptional year in 2020. The COVID-19 pandemic initially had an adverse impact on Indian capital markets, as indices across size and sectors fell during the period from February 2020 to May 2020. However, from June 2020 onward, all size and sector indices had a bull run through the end of the year. The S&P BSE SENSEX TR(opens in a new tab) increased from 60,211.40 on Dec. 31, 2019, to 70,543.23 on Dec. 31, 2020—a one-year absolute return of 16.31%.

Exhibit 1 and 2 showcase returns for India’s leading size indices in 2020.

From Exhibits 1 and 2, we can see that all five size indices performed well, and returns were promising for large-, mid-, and small-cap segments. The returns of the small-cap and mid-cap segments were better than those of the large-cap segment. The S&P BSE SmallCap(opens in a new tab) and S&P BSE MidCap(opens in a new tab) posted one-year absolute returns of 33.53% and 21.31%, respectively, while the S&P BSE LargeCap(opens in a new tab) and S&P BSE SENSEX returned 16.31% and 17.16%, respectively.

Exhibits 3 and 4 showcase returns for the 11 leading sector indices for India in 2020.

In Exhibits 3 and 4, we can see that most of the sector indices posted promising returns in 2020. The S&P BSE Healthcare(opens in a new tab) and S&P BSE Information Technology(opens in a new tab) performed exceptionally in 2020, with absolute returns of 62.61% and 60.05%, respectively. The S&P BSE Finance(opens in a new tab) and S&P BSE Utilities(opens in a new tab) were the worst-performing indices in 2020, with absolute returns of 1.25% and 4.18%, respectively.

To summarize, we can say that except for the couple of months at the beginning of the COVID-19 pandemic, the bulls had their way in 2020, and indices across size, segments, and sectors gave promising returns in 2020.

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