The year 2020 is almost at an end and investors all over India are surely looking forward to 2021 with the hope that the new year will bring in more positive returns in the stock markets. The benchmark indices have already seen a huge volatility, beginning the year with an all-time high in the Indian markets. The Nifty 50 has seen significant oscillations due to the coronavirus pandemic, but has managed to stay near its year-high levels despite the global economic turmoil.
Looking ahead into 2021, it looks like the Nifty 50 could have an auspicious start. The Nifty 50 is likely to ring in the New Year with an upsurge in sentiment. Analysts agree that the Nifty 50 is expected to extend its present rally and gain by an additional 1-2 per cent before hitting its 2021 highs. However, the outlook in 2021 is likely to remain volatile and investors should exercise caution while trading.
One important factor that will play a decisive role in Nifty 50’s performance in 2021 is the liquidity situation in the Indian markets. After an unprecedented liquidity inflow in 2020 due to market-wide desperation to buy into the markets, particularly during May and June, experts believe that the liquidity situation in 2021 would be relatively subdued.
Moreover, after the recent upgrade of the Indian economy to an emerging market status from a frontier market, foreign institutional investors are likely to be encouraged to bring more capital into the Indian markets, which could prove to be beneficial to the stock indices.
The Nifty 50 is also likely to be supported by the recent reform measures announced by the government. Sectors such as IT, Banking, FMCG, Consumption, and Pharmaceuticals are expected to benefit from the tax liberating, terrorism targeting, and foreign direct investment smoothening reforms, and their stocks are likely to surge.
In conclusion, the Nifty 50 is expected to start the New Year on a high note. The rally should be based on improved sentiment, foreign institutional investors’ confidence, and government reforms. However, investors should remain mindful of the prevalent volatility and liquidity situation, and take well-informed decisions while investing in the Nifty 50.
The year 2020 is almost at an end and investors all over India are surely looking forward to 2021 with the hope that the new year will bring in more positive returns in the stock markets. The benchmark indices have already seen a huge volatility, beginning the year with an all-time high in the Indian markets. The Nifty 50 has seen significant oscillations due to the coronavirus pandemic, but has managed to stay near its year-high levels despite the global economic turmoil.
Looking ahead into 2021, it looks like the Nifty 50 could have an auspicious start. The Nifty 50 is likely to ring in the New Year with an upsurge in sentiment. Analysts agree that the Nifty 50 is expected to extend its present rally and gain by an additional 1-2 per cent before hitting its 2021 highs. However, the outlook in 2021 is likely to remain volatile and investors should exercise caution while trading.
One important factor that will play a decisive role in Nifty 50’s performance in 2021 is the liquidity situation in the Indian markets. After an unprecedented liquidity inflow in 2020 due to market-wide desperation to buy into the markets, particularly during May and June, experts believe that the liquidity situation in 2021 would be relatively subdued.
Moreover, after the recent upgrade of the Indian economy to an emerging market status from a frontier market, foreign institutional investors are likely to be encouraged to bring more capital into the Indian markets, which could prove to be beneficial to the stock indices.
The Nifty 50 is also likely to be supported by the recent reform measures announced by the government. Sectors such as IT, Banking, FMCG, Consumption, and Pharmaceuticals are expected to benefit from the tax liberating, terrorism targeting, and foreign direct investment smoothening reforms, and their stocks are likely to surge.
In conclusion, the Nifty 50 is expected to start the New Year on a high note. The rally should be based on improved sentiment, foreign institutional investors’ confidence, and government reforms. However, investors should remain mindful of the prevalent volatility and liquidity situation, and take well-informed decisions while investing in the Nifty 50.
