InvestorQ : Did the Sensex manage to add substantial wealth in the year 2020?
vidhya Laxmi made post

Did the Sensex manage to add substantial wealth in the year 2020?

sarah Leo answered.
1 year ago

Of course, you can even intuitively guess that. The Sensex may have gained 85% from the lows of March 2020 but even if you look at the Sensex for the full year 2020, then the returns have been quite impressive at 15.7%. This sharp spike in the Sensex came on the back of recovery hopes and massive buying by FPIs infusing more than $23 billion.

Wealth creation was also seen across the board. Equity investors got richer by Rs.32,49,000 crore in 2020 despite the roller-coaster ride due to the COVID pandemic. Investors who had kept their cool and patience and added on to their positions would have done very well. Even SIPs have given phenomenal returns in the last one year.

It may be recollected that the Nifty touched a low of 7610 in March 2020 but bounced over 85% from these levels to close on the brink of 14,000 levels. The good thing was that the wealth creation was not restricted to the large caps alone. Even mid caps and small caps have done extremely well in the year gone by.

Volatility index or VIX went from a low of around 10 in the early part of the year to as high as 87 at the peak of the COVID crisis. Nifty almost moved converse to the VIX, as is the normal practice. The indices gained in 7 months and lost value in 5 months. However, in the latter half of the year, it was the FPI flows that really drove the markets higher.