Equity Markets | Performing Sectors | December 2021



  • It has been a volatile month for domestic equities again. Indices were up 3% – 6% in the first two weeks, most of these gains were wiped out in the 3rd week and regained again in the 4th week.
  • All market cap based indices delivered positive returns. Small-Caps outperformed and large-Caps underperformed.
  • No clear performance trend between defensive and high beta sectors.
  • Overall, IT has been the best performing index (+10.1%).
  • Amongst defensives, FMCG underperformed and Pharma marginally outperformed.
  • Metals had a comeback month and outperformed after 4 months of underperformance.
  • Capital Goods continue to outperform.
  • Financials and PSUs are amongst the worst performers (marginally negative). IPOs underperformed significantly (-6.9%).





  • Equity:
    • The emergence of the highly infectious Omicron variant led to a spike in equity market volatility since November, but markets quickly recovered as data from South Africa and the UK indicated a lower risk of severe disease.
    • Overall a good month for global equities, most markets delivered positive returns.
    • US: Continues to be amongst the better performing markets. Nasdaq and Small caps underperformed S&P 500.
    • India: Underperformed global peers for third month in a row – FII outflows continued in the secondary markets but quantum of selling reduced.
    • Europe: Were amongst the most impacted in the last 2 months (Omicron spread), recovered strongly in December.
    • Honk Kong / China: Given the concerns of slowing economic growth, both markets have been underperforming peers for a few months now.
    • Russia: Equities & Ruble both have been under pressure since 2 months now. There has been increased geopolitical pressure since October as Western nations expressed concerns about Russia’s military build-up near neighboring Ukraine.


  • Currencies:
    • December’s currency movements versus the USD were mixed – no clear risk on / off signals. Lot of country specific movements.
    • Australian Dollar strengthened versus USD as macro data reports were much better than expected.
    • Mexican Peso strengthened versus USD as the central bank raised interest rates more than market expectations.
    • The yen has been underperforming as the Bank of Japan’s dovish policy increasingly diverged from peers, who have signaled normalization from pandemic stimulus.

Leave a Reply