Indian Stock Market Soars as Fiscal Year Closes on a High Note
In an impressive display of resilience and growth, the Indian stock market concluded the fiscal year with remarkable gains. As of March 28, 2024, the Sensex surged by 655 points, closing at 73,651.35, while the Nifty ascended to 22,326.90, marking an increase of 203.20 points. This bullish trend spanned across all sectors, with the BSE midcap index escalating by 0.6% and the smallcap index appreciating by 0.3%. Reflecting on the fiscal year (FY24), it's evident that it was a banner year for the Indian markets, characterized by substantial returns and vibrant sectoral performance.
One of the standout narratives of FY24 was the Nifty's performance, positioning itself as one of Asia's best-performing markets with a nearly 29% USD return, second only to Japan. In contrast, markets in China and Hong Kong lagged significantly. In India, the spotlight shone on the mid and small-cap indices, which delivered returns 2.2-2.4 times higher than the Nifty, despite experiencing some corrections in the last month of the fiscal year.
Within the broader market index, public sector undertakings (PSUs), auto, energy, and pharma stocks were the top performers, offering lucrative returns. Conversely, the consumer and private banking sectors faced challenges, while the IT sector remained relatively subdued. The influx of investments by Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) underscored a robust year, with DIIs significantly boosting the market.
Highlighting individual achievements, 31 Nifty stocks registered positive returns, with notable performers including HDFC Life, L&T, and Hero MotoCorp. Meanwhile, sectors such as realty, PSU, power, and auto experienced the most significant gains in FY24, with 48 of the 50 Nifty stocks ending the year positively.
As the fiscal year drew to a close, the Indian equities market showcased a bullish trend, bolstered by spirited buying across the board. The mid- and small-cap stocks rebounded strongly, while upgrades in domestic economic forecasts painted an optimistic picture for FY25. However, concerns linger regarding the premium valuations of mid-cap stocks, potentially impacting market breadth in the short to medium term.
The Bank Nifty index also demonstrated strength, surpassing significant technical thresholds and hinting at future gains. However, immediate resistance levels suggest caution among investors.
The Indian rupee faced depreciation against a strengthening dollar, influenced by rising crude oil prices and fluctuations in the dollar index. Nonetheless, the overall sentiment in the market remains positive, with investors and analysts looking forward to a promising FY25.
In summary, the Indian stock market's robust performance in FY24 offers a beacon of optimism for investors and stakeholders. With significant gains across a broad array of sectors and strong contributions from both FIIs and DIIs, the market is poised for continued growth in the coming fiscal year, despite potential challenges and volatility.
Analyst comment
Positive news. As an analyst, expect the Indian stock market to continue its growth in FY25 due to strong performance in FY24, investments from FIIs and DIIs, and optimistic economic forecasts. However, caution is advised regarding premium valuations of mid-cap stocks and potential market volatility.
