India Stock Market Story - CY 2013 HAD MANY SURPRISES

Published on Tuesday, December 31, 2013 by Dilip Davda | Modified on Wednesday, July 22, 2015

At the outset 'A VERY HAPPY AND PROSPEROUS NEW YEAR 2014 TO ALL'. Today we are ushering into New Year 2014 with a hope that the Indian economy will mark positive trends as worst is seems to be over and we might see change of guards at the centre. CY 2013 that has just gone by gave many surprises. First and formost is the continued inflow from FIIs which marked net inflow of Rs. 1,12,000 crore plus which was the third net inflow above Rs. 1 lakh crore in last 10 years. Earlier in CY 2010 and 2012, we marked net inflow of Rs. 1.33 lakh crore and Rs. 1.28 lakh crore respectively.

Thus although inflow was lower than earlier two occasions, we marked indices marking new milestones as S & P BSE Sensex and NSE Nifty marked new all time high of 21483.74 and 6415.25 respectively. Not only that, the year also closed on a positive note with Sensex closing at 21170..68 (+1743.96 points i.e. around 9%) and NSE Nifty closing at 6304.00 (+398.90 points i.e. 7%). And this was all despite absence of masses that were forced to seat on fence with Periodic Call Auction mode for over 2400 odd scrip on both the exchanges. FII driven liquidity alone kept the indices on gaining momentum with selective play as even Mid Cap and Small Cap indexes lost around 6% and 12% per year respectively. LAST DAY OF CY 2013 i.e. 31.12.2013=13, SENSEX CLOSED AT 21172=13 AND NIFTY CLOSED AT 6304=13, WHAT A FAREWELL INDEED.

Rupee that began the year at a level of around Rs. 55 a dollar marked the historic low of Rs. 68.79 in August 2013 before recovering and settling around Rs. 61.80 by the year end and thus marking loss of 13%. Gold and Silver too gave negative returns of 8% and 24% respectively amidst fear of QE tapering. The noteworthy returns were from IT sector that gave 32% returns for the year followed by Pharma and FMCG sectors.

Commodities and Securities exchanges witnessed lower turnover for the year following fall out of NSEL and its ongoi8ng payment crisis. The year witnessed few bill passages at the Centre that included Food Security Bill, Land Acquisition Bill, Company Bill that failed to cheer corporate India that still has no confidence in the reforms.

Crude too kept surging and moved between $ 93-111 for Nynex and $112-119 for Brent with last trade at $ 100 and 112 respectively. Thus firm Crude Oil and Weak Rupee brought frequent petrol and diesel price hike that kept impacting inflations. For November we marked the CPI inflation of 11.24% and WPI inflation of 7.52%.

The year also witnessed change of guard at Finance Regulator body RBI. On his appointment, market gained some ground, but his policy too did not defer the ex Governor Subbaraao and that kept rate sensitive industry in doldrums for most part of the year. GDP marked below 5% growth and CAD too remains very high that too kept check on the sentiment of local investors. As known, DIIs were the net sellers for most part of the year and have provided the deliveries to FIIs.

Thus despite all odds, we marked the end of CY 2013 on a positive note mainly on the hopes of good agricultural products following above normal monsoon and possibility of change of guard at the Centre in the forthcoming general elections.

Let us hope that the year 2014 brings cheer for investors with new milestones for benchmarks.