Mumbai, Apr 2 (IANS): As the Indian stock market surged to new highs in FY 2020-21 amid a bull run, the top gainers in the sectoral space were metals, auto and technology.

All sectors delivered positive returns in the last financial year.

A report by Motilal Oswal Financial Services said that the theme of FY21 was high beta, cyclicals and value. Quality and defensive themes, the flavour of the past few years, took a breather.

"The Nifty Midcap 100 (up 102 per cent YoY) and Nifty Smallcap 100 (up 126 per cent YoY) outperformed the benchmark. Top gainers in the sectoral space were metals (up 151 per cent), autos (108 per cent), technology (103 per cent), real estate (90 per cent), and private banks (75 per cent) while consumers underperformed," it said.

Noting that India recorded the highest ever inflow of foreign institutional investments (FII) of $37.6 billion in the last financial year, it said that the total inflow of FIIs in FY21 was greater than the cumulative inflows in the previous six years.

On the other hand, domestic institutional investments (DII) recorded the first outflows of $18.4 billion after five years of inflows.

"After the Covid led sharp correction in March '20, which dragged the FY20 returns, markets gradually recouped its losses in FY21, led by policy measures by governments, central banks as well as a better than expected corporate earnings performance which resulted in two consecutive quarters of earnings upgrades, a first in many years," the report said.

It added that Nifty earnings growth of 13.5 per cent in FY21E (Estimate) is expected to be the best in six years.

Noting that the year ended far better than it began, as the economy and markets recovered post May 2020 with gradual easing of lockdowns, it said that the corporate India surmounted the challenges posed by Covid with unprecedented cost containment measures with parallel improvement in balance sheet as well as cash-flows.

The Motilal Oswal report noted that going ahead in FY22, two things will drive the markets from, the pace of vaccination and corporate earnings.

"Given the recent resurgence in Covid-19 cases, the pace of vaccination will assume crucial importance. Expeditious containment of Covid-19 cases and accelerated pace of vaccination will provide comfort for FY22 economic growth recovery."

Secondly, the expectations for FY22 earnings are running high at over 30 per cent growth in Nifty FY22E EPS (earnings per share). Given the rich valuations, any misses on FY22 earnings delivery may act as dampener, it added.