New Delhi: From the depths of despair to an adrenaline-pumping ascent, equity investors traversed the whole gamut of emotions in 2020 as a once-in-a-lifetime pandemic followed by equally unprecedented stimulus measures whiplashed global stock markets, upended conventional wisdom and blurred the lines between investing and speculation.
Dalal Street witnessed gut-churning fluctuations, with the BSE Sensex swinging between historic losses and eye-popping gains, sometimes in the same session, and confounded veterans and rookies alike.
No one had anticipated that the Sensex and Nifty would be bludgeoned in late March, or that they will stage a remarkable recovery almost immediately and soar to all-time highs by the end of the year. But, 2020 has been a year full of events outside the realm of imagination.
The year started off on an ominous note for financial markets when on January 3 top Iranian commander Qasem Soleimani was killed in a US drone strike in Iraq, ratcheting up tensions in the Middle East.
The Sensex tumbled more than 900 points over two sessions but resumed its upward march to hit life highs later that month.
Equities largely shrugged off initial reports of a coronavirus outbreak in China, in tandem with the global bourses, and looked ahead to the Budget.
However, the Sensex logged one of its biggest single-day declines on February 1 after the Union Budget failed to live up to market expectations of growth-boosting measures and fiscal discipline.
The real test, alas, was ahead.
From mid-February, world stocks started getting skittish as it became clear that the COVID-19 crisis would not be limited to China.
To add to the woes, Yes Bank was placed under a moratorium in a rare move, triggering a crisis of confidence in the domestic banking sector.
The explosive cocktail of a global market meltdown and domestic troubles proved too much to take for Dalal Street. Four of the biggest single-day declines in the history of BSE Sensex came in March 2020, leaving participants shell-shocked.
Its biggest-ever plunge (in absolute terms) was on March 23, when the benchmark crashed 3,934.72 points or 13.15 per cent.
Astonishingly, March also saw some of the index's biggest up-moves amid the RBI stepping in with emergency liquidity support.
The Sensex's largest-ever single-session gain came a little later on April 7, when it zoomed 2,476.26 points as investors wagered on more stimulus measures from the government to battle the economic fallout of the pandemic.
The turbulence on the domestic bourses also mirrored global market turmoil. The Dow Jones suffered its worst fall, emerging market assets were routed and in a mind-boggling moment, US oil futures turned negative for the first time in history.
For a while, the world stopped making any sense.
With the world economy comatose and governments overwhelmed by a cataclysmic health crisis, the task of propping up the financial markets and restoring investor confidence fell to the global central banks.
"2020 will probably go down in history as a year when global central bankers injected close to $11 trillion as stimuli to combat the COVID pandemic, said S Ranganathan, Head of Research at LKP Securities.
The massive money printing by the US Federal Reserve and its peers sparked a breathtaking turnaround in global stock markets.
Never bet against the Fed, as the saying goes.
Flush with funds, foreign portfolio investors (FPIs) poured in billions of dollars into emerging markets, with India topping the chart in Asia.
FPI net inflows into Indian equity markets have crossed Rs 1.5 lakh crore (over $20 billion) this year -- a lifetime peak.