Indian capital market has been on a rollercoaster ride during the tumultuous year of 2024, which witnessed a series of national and international events, that shaped the market. While the Indian stock exchanges soared with higher expectations from the General Elections 2024, polls for eight state assemblies and the US Presidential Election pushed the indices on a higher trajectory, lesser than expected corporate results and RBI’s decision to leave the interest rates unchanged pulled them down, much to the chagrin of the investors.
The Union Budget laid out an expenditure plan of Rs. 48.21 lakh crore. It included expenditures of 11.1 lakh crore on infrastructure projects, Rs 2.66 lakh crore on rural development, and Rs 1.48 lakh crore on education.
Sensex, Nifty Soar
The stock exchange welcomed the Year 2024 with optimism. Though the Sensex opened flat at 72,240 points and the Nifty at 21,741 points, it improved quickly. After going through two weeks of highs and lows, the benchmark Sensex hit its all-time high on January 16 and reached 73,128 points on January 18, 2024.
Also Read: Indian Economy In 2024: Resilient Growth Amid Inflationary Pressures, Record Forex Reserves
However, after experiencing too many ups and downs, the BSE and the NSE are most likely to end 2024 with a gain of 8%, much lower than the 20% profit in the year before.
Sensex, Nifty Reach Record High
Riding on the wave of hope for the Lok Sabha Elections 2024, and increase in government expenditure, the Indian stock markets gained almost 20%. While the benchmark Sensex touched a record height of 85,978.25, the Nifty too reached a lifetime-high of 26,277.35 in September.
However, the stock markets could not keep the momentum due to the worse-than-expected corporate results for the second quarter of the financial year, and about the Sensex and the Nifty fell by about 10% in October.
Chinese Stimulus Package Lures Away Investors
Besides, in an attempt to attract foreign investors and stop the rot, China announced a $1.4 trillion stimulus package in November, leading to many investors considering the Communist-controlled economy as the next destination. Indian stock market received the brunt.
The FIIs offloaded their portfolios in the Indian stock markets to a considerable extent due to a number of political and economic factors, leading to wide-ranging corrections in large-cap blue-chip scrips. However, due to the fund flows from Domestic Institutional Investors and other favourable factors, the small caps and medium caps overperformed and kept the momentum to some extent.
BSE, NSE Lose 8%
Both small- caps and midcaps performed better than expected and gained by about 25% to 30% in the Year 2024, while the BSE and NSE lost about 7-8% in September. This is much less than BSE Midcaps and BSE Small caps in 2023 when they soared to 45-47%.
Buoyed by a strong US Dollar and better US Treasury yields, the FII opted out to money in the IS stock markets during the Year 2024, leading to decreased funds and activities in the Indian bourses. It led to an outflow of Rs 85,000 crore by the FIIs.
However, the DII kept on buying in the Indian markets, pushing them above. They invested Rs 1 lakh crore in the stock markets. It also boosted commodity-linked scrips like those of metals and mining.
It can be understood by the fact that while the FIIs bought Indian shares worth a net $394.5 million, DIIs put around Rs 511124.5 lakh crore in Indian markets.
SIP Investments Pour In
Meanwhile, the investment through the Systematic Investment Plan kept on pouring and Rs 25,323 crore came through this route in in October. Monthly SIPs have been a regular and ever-increasing rout and it has been rising above Rs 15,000 crore per month since July 2023.It also registered an increase of 139% compared to last year.
The Indian capital market has performed extremely well during the Year 2024 as it has raised Rs 1.8 lakh crore through 317 IPOs. The investment through this route surpassed Rs 1.3 lakh crore in 2021.
