New Delhi: They say "there's an opportunity in every crisis," and this couldn't be more true when reflecting on the stock market's journey this year. It’s been quite a rollercoaster ride and investors got many opportunities to buy on dips. According to the data, the stock market experienced 9 declines, ranging from 1.24% to 2.74%, while there were 11 gains, ranging from 1.62% to 3.4%.
When the year started, the market expected several events in 2024, but it's safe to say no one could have predicted just how volatile the year would be. The Sensex hit its lowest point at 70,370, but by the year's peak, it reached 85,978 points. This shows that the Sensex has experienced a movement of nearly 15,000 points throughout the year. Starting at around 72,000 in January, it climbed up to 85,978 and is currently hovering around 81,500. So far, it’s gained close to 13% (9,257 points) by December 11, 2024.
As for the Nifty, it’s made a similar journey, ranging from 21,238 to 26,277 points. On average, by December 13, the Nifty has gained 2,983 points, or around 13.72%. Throughout the year, we’ve seen swings of almost 5,000 points.
The strength in the stock market this year isn’t an isolated case—it’s been a trend ever since the pandemic. Since the market hit its low in March 2020, the blue-chip Nifty 50 has surged by over 200%. Today, India’s stock market has reached a total market cap of about $5 trillion, as more and more investors are confident about India’s long-term growth potential.
This year started off on a high, and even though the returns over the last five months haven’t been as strong, the earlier part of the year was excellent for investors. Several factors contributed to this. A wealth manager and co-founder of Client Associates Rohit Sarin spoke to ETV Bharat, explaining that Indian markets were quite pricey in terms of valuation.
However, when China announced a stimulus, foreign investors pulled out their funds from India and reinvested them in China, which caused the Indian market to fall in the second half of the year.
Rohit Sarin said that the Chinese market, after COVID-19, had given negative returns, and it was looking relatively cheap to investors. This is why, when China's central bank announced a stimulus, foreign institutional investors (FIIs) started selling off in the Indian market to invest in China. This impact was felt in the markets in October. In addition to this, manufacturing showed signs of slowing down, and the decline in company earnings was reflected in their quarterly results, further contributing to the market downturn in November.
According to his views, this was a healthy correction in the market. Whenever there’s adverse news, market sentiment tends to follow the trend, which is why the markets were in the red during that period. However, the market now appears to be more realistic.
Key Events of the Year
He also mentioned that key events for the market this year included the national elections, the Ukraine-Russia war, the US elections, and the Israel-Gaza conflict. These events significantly influenced the markets. He pointed out that due to these events, the Western economy, as well as global economic growth, was slower than expected, but this could improve in 2025. These events also impacted the Indian economy, though the positive aspect was that oil prices remained manageable and did not significantly affect our import bill this year.
He acknowledged that since our interest rates were lower compared to other parts of the world, our markets performed well. He also noted that while the GDP for the second quarter was surprising, at 5.4%, he remains optimistic about India’s long-term growth story. He believes that the data from the next quarter onwards will give a clearer picture, which will help the market gain a more defined direction moving forward.
Where to Invest Next Year?
Sectors that have not performed well in the long run are expected to show better results next year. Rohit Sarin stated that private banks are likely to outperform next year. While the Nifty delivered an approximate return of 20% last year, private sector banks only provided a return of 15%. This means they did not fully participate in the market rally.
Be Aware of Cyber Fraud Next Year
He also cautioned investors not to fall for spam calls. He emphasised that everyone should start becoming more aware of such scams, particularly senior citizens, who should avoid responding to unknown numbers and clicking on unfamiliar links to safeguard themselves.
This year was overall positive, indicating that the country’s economy is growing rapidly. Over the next 10 years, continuous growth is expected. While there may be volatility, the country's strength will support its economic progress. He also advised people to become investors rather than traders, as long-term investing is likely to yield much higher returns compared to short-term gains.
Global Research on Indian Markets
According to a report released by global financial services firm JP Morgan in September, India has become one of the fastest-growing economies in the world. The report forecasts that India’s real GDP will grow by 6.5% in 2024. Based on data from the International Monetary Fund (IMF), India is on track to grow at an average rate of 6.1% over the next five years, positioning it as the world’s third-largest economy by 2027, behind the U.S. and China. The country is expected to double its current GDP of $3.5 trillion to $7 trillion by 2030.
While short-term challenges like demand fluctuations and unusual weather patterns could impact earnings, the long-term outlook for India remains positive. The country’s strong structural factors and growth potential continue to attract global investors.
JP Morgan’s research highlights several factors driving India’s growth. These include a young and growing population, increasing urbanisation, rising wealth, an effective regulatory system, a government pushing for stronger infrastructure, a manufacturing sector that is gaining traction due to supply chain diversification, and growing renewable energy capacity.
India's demographic dividend is expected to continue at least until 2055-56, with its peak around 2041, when the working-age population (20-59 years) is expected to make up 59% of the total. Additionally, the middle class is growing quickly, rising at an annual rate of 6.3% since 1995 and now accounting for about a third of the population.
Drivers of India’s Growth
Experts believe that structural reforms are changing how business is done in India, leading to increased efficiency and productivity gains that will benefit the economy in the long term. The government's infrastructure investments, pro-business policies, and rising government spending are all helping position India as a global manufacturing hub for the future.
Major Sensex Gains in 2024:
1. 29.01.2024: Sensex up 1,240.90 points (1.76%) to 71,941.57. Major gainers: Reliance Industries, Tata Motors, Power Grid, L&T, Kotak Mahindra Bank, NTPC, Titan, UltraTech Cement.
2. 01.03.2024: Sensex up 1,245.05 points (1.72%) to 73,745.35, hitting an all-time closing high. Positive momentum driven by global markets.
3. 23.05.2024: Sensex reached an all-time peak of 75,418.04, up 1,196.98 points (1.61%).
4. 03.06.2024: Sensex gained 2,507.47 points (3.39%) to 76,468.78.
5. 05.06.2024: Sensex rose 2,303.19 points (3.20%) to 74,382.24, despite FII selling and domestic institutional investor outflows.
6. 07.06.2024: Sensex surged 1,592.43 points (2.12%) to 76,666.94 after RBI kept repo rate unchanged at 6.5%.
7. 26.07.2024: Sensex up 1,292.92 points (1.62%) to 81,332.72.
8. 12.09.2024: Sensex gained 1,439.55 points (1.77%) to 82,962.71, with an intra-day high of 83,116.19.
9. 20.09.2024: Sensex hit an all-time high, closing at 84,544.31, up 1,359.51 points (1.63%).
10. 22.11.2024: Sensex surged 1,961.32 points (2.54%) to 79,117.11. Nifty gained 524.50 points (2.25%). Market cap of BSE rose by Rs 7.2 lakh crore to Rs 432.55 lakh crore.
11. 05.12.2024: Sensex rose 1,361.41 points (1.7%) to hit an intraday high of 82,317.74.
Bloodbath in Share Market in 2024:
12. 17.01.2024: Sensex fell by 1,628.01 points due to a decline in HDFC Bank shares, impacting banking stocks and the broader market.
13. 23.01.2024: Sensex dropped 1,053.1 points (1.47%) to 70,370.55 due to HDFC Bank’s poor performance and collapse of Zee Entertainment’s merger.
14. 09.05.2024: Sensex fell 1,062 points (1.45%) to 72,404, driven by FII selling and election result uncertainty.
15. 04.06.2024: Sensex crashed by 4,390 points, losing Rs 31 lakh crore in market value after election results caused investor concern about policy changes.
16. 05.08.2024: Sensex dropped 2,222.5 points (2.74%) to 78,768.42 amid global recession fears and geopolitical tensions in the Middle East.
17. 06.09.2024: Sensex fell 1,017.23 points (1.24%) to 81,183.93, wiping off Rs 5 lakh crore in market cap due to anxiety over a US jobs report.
18. 30.09.2024: Sensex dropped 1,272.07 points (1.49%) to 84,299.78, amid escalating geopolitical tensions in West Asia.
19. 03.10.2024: Sensex plunged by 1,750 points due to Middle East tensions, rising oil prices, and concerns over Chinese stocks, leading to Rs 9.71 lakh crore in market cap loss.
20. 28.11.2024: Sensex dropped 1,190 points (1.48%) to 79,043, with Nifty falling 361 points (1.49%) to 23,914, due to escalating Russia-Ukraine war and US inflation concerns.
