Equity market review: December 2020

Last updated: 04 Jan, 2021 | 11:00 am

Equity market review: December 2020

India - Equity market commentary 

The Indian equity benchmark index Nifty scaled fresh record highs in the month, as a lot of favourable domestic and global factors kept investor sentiment upbeat. Nifty gained around 6.26% in the month to 13,981.

All of the major sectors ended the month in the green, with NIFYT IT being the top performer.

Positive Market moving news during the month were

  • The USA approving fiscal stimulus package.
  • Brexit trade deal between with EU and the UK.
  • Regulatory approvals for COVID vaccines.
  • Macro data points indicating quicker than estimated economic recovery.

Negative Market moving news during the month were

  • New COVID strain found in the UK.
  • Renewed lockdowns in several parts of the globe.

Broad Market - Top Movers

The charts below shows top movers across market caps for the month of December 2020 :

Sectoral - Best and Worst Performer 

The table below shows sector-wise best and worst performers for the month of December 2020.

FII Flows

  • FIIs have more than 20% ownership in Indian stocks, the single biggest entity after promoters. Its is well known and observed that FII flows are a major factor behind the direction of the Indian equity markets. 
  • Foreign Institutional Investors (FIIs) continued to pump money in the Indian equity market with the December tally at ₹62,016 crore beating the all-time high recorded in the previous month. 
  • These inflows are because of the influx of global liquidity, near-zero interest rates in the US and faster than expected economic recovery.

INDmoney Analysis

  • Book profit in case of significant gains and avoid lump-sum investments in the stock market. Read our analysis on market valuation here
  • Stagger your lump sum equity investments into smaller fractions before deploying into this market
  • Continue your SIP investments
  • Stop large lump sum investments into NIFTY ETFs.

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