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BSE Sensex ended the calendar 12 months 2024 with a stable achieve of 8.2%. The NSE Nifty 50 mopped up a 8.8% achieve this 12 months.
Stock market in 2024: A glance again
Indian Stock Market in 2024: As 2024 involves a detailed, traders mirror on a 12 months marked by volatility and shifting dynamics. From central financial institution coverage modifications to rising sectoral tendencies, 2024 was a 12 months of warning and alternative for the inventory market.
Indian inventory market benchmarks, the Sensex and Nifty 50, closed the 12 months with modest features. On December 31, the Sensex ended the day 109 factors decrease, or 0.14%, at 78,139.01, whereas the Nifty 50 settled at 23,644.80, down 0.10%.
In the method, the BSE Sensex ended the calendar 12 months 2024 with a stable achieve of 8.2% or 8,809 factors, after having registered a summit at 85,978 through the 12 months. The NSE Nifty 50 mopped up an 8.8% achieve in 2024. The benchmark indices have been up for the ninth straight calendar 12 months; rising as a lot as 200% on this interval.
Key Market Movers in 2024
Elections: Shocks and Surprises
The election cycle of 2024 was the most important in recorded historical past, with over 64 international locations going to the polls. However, Indian markets centered on three main elections: the June Lok Sabha election, the November US Presidential election, and the Maharashtra state elections.
The Indian Lok Sabha election outcomes have been a shock to the markets, which had anticipated a sweeping victory for the BJP-led NDA coalition. Instead, the BJP fell in need of a majority, triggering a pointy sell-off, with the Sensex and Nifty each dropping over 6%, and small- and mid-cap indices struggling an 8% drop.
Subsequent elections in Maharashtra, a state essential for India’s GDP and overseas direct funding, have been pivotal. The BJP’s sturdy efficiency within the Maharashtra Assembly elections helped reassure traders. Meanwhile, the US Presidential election additionally impacted Indian markets, with the Nifty 50 and Sensex each rising over 1% following Donald Trump’s victory, pushed by features in IT and pharma sectors as a result of weaker rupee.
Union Budget: Tax Changes and Populist Measures
The Union Budget of 2024, launched after a stunning Lok Sabha consequence, centered closely on rural empowerment, employment, and skilling, aimed toward appeasing voters. The funds allotted vital funds to Andhra Pradesh and Bihar, crucial states for the BJP’s majority within the Lok Sabha.
However, the largest shock for the markets got here with tax hikes. The Finance Ministry raised the Securities Transaction Tax (STT) on derivatives and elevated Long-Term Capital Gains (LTCG) tax to 12.5% and Short-Term Capital Gains (STCG) tax to twenty%. This transfer, together with the rally in markets following the funds, led to a 40% surge within the benchmark indices from the earlier 12 months’s funds.
SEBI’s Regulatory Actions
In 2024, the Securities and Exchange Board of India (SEBI) carried out vital modifications that impacted the securities ecosystem. The regulator launched stress exams for mutual funds, requiring them to shut liquidity positions, addressing issues about small-cap shares and market volatility.
Additionally, SEBI overhauled the futures and choices (F&O) sector, implementing tighter rules to curb retail losses. Changes included elevated lot sizes, fewer weekly expiries, and bigger contract sizes, all aimed toward lowering volatility and retail investor threat.
FIIs
Foreign investors performed a vital function in 2024, with the market seeing substantial inflows and outflows. The most important promoting occurred in October and November, pushed by stimulus measures in China. However, overseas traders returned in December, serving to bolster the market, with FPIs investing Rs 1,656 crore in India in 2024, persevering with the constructive pattern from 2023.
RBI’s Oversight
The Reserve Bank of India (RBI) attracted consideration in 2024 for its crackdown on microfinance establishments, gold financiers, and several other banks, together with Kotak Mahindra. The RBI centered on points associated to mortgage disbursal and regulatory non-compliance. The central financial institution’s actions have been seen as a part of a broader effort to keep up monetary system integrity and cut back systemic dangers.
Adani-Hindenburg Case
After a tumultuous 2023, the Adani Group confronted renewed scrutiny in 2024, as Hindenburg Research returned with contemporary allegations. The short-seller accused SEBI’s chairperson of a battle of curiosity, suggesting inadequate investigation into Adani Group firms. SEBI denied these claims, and the market reacted to the turbulence in Adani shares, though broader indices remained comparatively unaffected.
IPO Market: A Record Year
2024 witnessed a file variety of IPOs, with Indian firms elevating a staggering Rs 1.6 lakh crore, with a 31% common itemizing premium. The shopper, auto, and IT sectors led the best way, and small- and mid-cap IPOs garnered vital consideration, reflecting the broader market rally. The SME section noticed a surge, with the quantity raised rising from Rs 1,900 crore in 2023 to over Rs 8,600 crore in 2024.
Large-Caps Underperform
Despite a powerful 12 months total, large-cap shares lagged behind the broader market. The Nifty 50 delivered returns of 9.5%, a lot decrease than the 19.42% rise seen in 2023. Several high-profile firms similar to Reliance Industries, HUL, and Kotak Mahindra Bank noticed adverse returns, contributing to the underperformance. In distinction, the Nifty Smallcap 100 and Nifty Midcap 100 indices surged by 23.3% and 23.4%, respectively.
US Federal Reserve Impact
The US Federal Reserve’s financial coverage modifications additionally influenced international markets. The Fed began easing rates of interest in 2024, slicing them 3 times through the 12 months. The market reacted to President-elect Donald Trump’s tax plans, which posed dangers to inflation and will result in greater tariffs. Despite expectations for extra price cuts, the Fed’s hawkish stance in December, limiting cuts to 2 in 2025, despatched shockwaves by way of the markets.
The Indian market, together with international indices, responded to those developments, with IT and pharma shares benefiting from a weakening rupee.
Stock Market In 2025
2024 was a 12 months of blended outcomes for the Indian inventory market, with coverage shifts, election surprises, and sectoral tendencies driving volatility. While large-cap shares lagged, mid- and small-cap shares thrived, and overseas investor exercise had a notable impression. As we transfer into 2025, the evolving international and home panorama will proceed to form the market’s trajectory.
