The stock market depends on the large mark cap companies and banks to run in these harsh times and generate revenue. If they are shut, then the stock market would tank. Throughout the country, localized lockdowns impact these companies but then no so much as how it was back in March 2020. Thus, the companies are still performing but nothing out of this world until everything normalizes.
Ever since the huge slump in the stock market in March 2020, the Indian stock market has risen sharply and swiftly to the 14,500 mark on NIFTY within a year. However, its looking like it might break the 15,000 mark; nobody knows as the market can change anytime, and the pandemic has made it quite unpredictable at most.
However, in 2021, despite the country reporting lakhs of covid-19 positive cases, the market seems to rise despite having localized lockdowns in place. Why is that so? Well, there’s a simple answer to that question. Let’s start with the first nationwide lockdown. Almost everything was shut down, and the entire country stopped for weeks, if not months, to stop the spread. The large market cap companies took a big hit, and the stock market plunged below the 9000 mark.
But when the restrictions were relaxed, you would have seen a steep rise in the stock market, where trading increased actively. More people invested significantly, owning to the bearishness of the stock market. Also, this led to more investors and traders figuring out ways to make money in the stock market. Moving ahead to 2021, the country has kept the idea of a nationwide lockdown as a last resort, but instead, there are localized lockdowns. These lockdowns were left in the hands of the state governments to regulate their state and do as they wish.
These lockdowns imposed companies in the stock market to function while having a bit of setback due to lesser demand and supply due to the partial lockdown. With that being said, industrialists pointed out the economic impact of a nationwide lockdown, and the state governments had to impose partial lockdowns to stop the spread despite having active cases rising exponentially day-in and day-out.
Therefore, companies are restricted towards growth but still project a good bullishness based on their business type and profits. Software giants have had it good as they imposed a work from home culture. Other FMCG companies did provide good profits owing to the daily essentials being in greater demand for their products by the public. Moreover, during the pandemic, the healthcare stocks have also seen a greater rise, all thanks to their efforts in producing the vaccines and their demand due to the pandemic again raising their stock prices and lifting the stock market to a bullish trend.
But looking at a cumulative overview, then NIFTY did come back strong, and that’s where the lockdown-like situation isn’t hurting the stock market. No doubt there is still bearishness in the market, but it won’t be anything like we saw back in March 2020 where things unexpectedly took a turn for the worst. One can expect the market to stay under the 15,000 mark for some time now. If things improve in the country with the caseloads going down and many people being vaccinated, then having the stock market to a bullish nature would take no time whatsoever.