The year 2015 was a
volatile year for the Indian Equities after the runaway rally in 2014. The
Indian Markets in CY 2015 witnessed numerous global events such as the Greece
Crisis, Brazil Junk Rating, Chinese
Meltdown and Fed rate hike decision. On the domestic front, we witnessed
a weakening rupee, volatile IIP, shrinking corporate profits.
Unlike 2014, FII participation
was muted and DII’s outperformed the FII’s in terms of pumping money in the
markets. The year faced global
turmoil with higher intensity and it was reflected in the performance of key
benchmarks, Sensex & Nifty, both tumbled to the tune of 7%-8%. Amidst the
jitters in key benchmarks, the mid-caps and small-caps baskets outperformed in
In the sectorial
space, Pharma was the winner of 2015 despite being in news for all the wrong
reasons form the global fronts such as enquiries, regulatory warnings. IT and FMCG were the other indices that
managed to save their face in this calendar year. On the contrary, Banks,
Capital Goods and Utilities led the worst performers.
The major boost for
the Indian Economy has been rock bottom oil prices and this has ensured the
targeted fiscal deficit to be in check. Inflation was also in manageable
proportions and aided the RBI Guv for easing the interest rate scenarios. RBI
also ensured that Indian Rupee did not breach it’s all-time lows despite the
global headwinds and devaluation in global currencies against the dollar. The
FDI picture was rosy for the India Inc. throughout the year, courtesy of the
reforms from the ruling govt.
On the flip side,
corporate earnings data signalled signs of dismay, quarter after quarter. The
dull Monsoon added to the woes resulting in a severe rainfall deficit for the
second year consecutively. The IIP data was inconsistent and clueless in entire
2015 and agriculture and manufacturing sectors took a hammering. The exports
were a complete drag in 2015 India story because of low commodity prices and
global slowdown. Lastly, the failure of passing GST bill in the upper house due
to political impasse was a major setback on the reforms path of India Inc.
MF and IPO Revival
nervousness in the Indian Equities, the retail investor participation in the MF space increased and welcome sign was that most of this came from the SIP route.
Primary Market was the most ecstatic story of the year with more than 50% of
the IPOs quoting at premium of 30% or more. The same euphoria was visible in
the BSE IPO Index which yielded ~ 17% returns in this calendar year.
India's strong macro
situation and increased government spending makes a case for promising CY2016
for Indian Markets. However the global uncertainties and diminishing appetite
for EMs of foreign funds are still a cause of concern. The revival in corporate
earnings and radical reforms such as GST bill can turn the tide for Indian
Equities and aid in alluring foreign investments.