Sensex, Nifty50 End 2024 With Modest Gains: A Look Back At The Key Market Movers – News18
Last Updated:
BSE Sensex ended the calendar year 2024 with a solid gain of 8.2%. The NSE Nifty 50 mopped up a 8.8% gain this year.
Stock market in 2024: A look back
Indian Stock Market in 2024: As 2024 comes to a close, investors reflect on a year marked by volatility and shifting dynamics. From central bank policy changes to emerging sectoral trends, 2024 was a year of caution and opportunity for the stock market.
Indian stock market benchmarks, the Sensex and Nifty 50, closed the year with modest gains. On December 31, the Sensex ended the day 109 points lower, or 0.14%, at 78,139.01, while the Nifty 50 settled at 23,644.80, down 0.10%.
In the process, the BSE Sensex ended the calendar year 2024 with a solid gain of 8.2% or 8,809 points, after having registered a summit at 85,978 during the year. The NSE Nifty 50 mopped up an 8.8% gain in 2024. The benchmark indices were up for the 9th straight calendar year; rising as much as 200% in this period.
Key Market Movers in 2024
Elections: Shocks and Surprises
The election cycle of 2024 was the largest in recorded history, with over 64 countries going to the polls. However, Indian markets focused on three major elections: the June Lok Sabha election, the November US Presidential election, and the Maharashtra state elections.
The Indian Lok Sabha election results were a shock to the markets, which had expected a sweeping victory for the BJP-led NDA coalition. Instead, the BJP fell short of a majority, triggering a sharp sell-off, with the Sensex and Nifty both dropping over 6%, and small- and mid-cap indices suffering an 8% drop.
Subsequent elections in Maharashtra, a state crucial for India’s GDP and foreign direct investment, were pivotal. The BJP’s strong performance in the Maharashtra Assembly elections helped reassure investors. Meanwhile, the US Presidential election also impacted Indian markets, with the Nifty 50 and Sensex both rising over 1% following Donald Trump’s victory, driven by gains in IT and pharma sectors due to the weaker rupee.
Union Budget: Tax Changes and Populist Measures
The Union Budget of 2024, introduced after a surprising Lok Sabha outcome, focused heavily on rural empowerment, employment, and skilling, aimed at appeasing voters. The budget allocated significant funds to Andhra Pradesh and Bihar, critical states for the BJP’s majority in the Lok Sabha.
However, the biggest surprise for the markets came with tax hikes. The Finance Ministry raised the Securities Transaction Tax (STT) on derivatives and increased Long-Term Capital Gains (LTCG) tax to 12.5% and Short-Term Capital Gains (STCG) tax to 20%. This move, along with the rally in markets following the budget, led to a 40% surge in the benchmark indices from the previous year’s budget.
SEBI’s Regulatory Actions
In 2024, the Securities and Exchange Board of India (SEBI) implemented significant changes that impacted the securities ecosystem. The regulator introduced stress tests for mutual funds, requiring them to close liquidity positions, addressing concerns about small-cap stocks and market volatility.
Additionally, SEBI overhauled the futures and options (F&O) sector, implementing tighter regulations to curb retail losses. Changes included increased lot sizes, fewer weekly expiries, and larger contract sizes, all aimed at reducing volatility and retail investor risk.
FIIs
Foreign investors played a crucial role in 2024, with the market seeing substantial inflows and outflows. The most significant selling occurred in October and November, driven by stimulus measures in China. However, foreign investors returned in December, helping bolster the market, with FPIs investing Rs 1,656 crore in India in 2024, continuing the positive trend from 2023.
RBI’s Oversight
The Reserve Bank of India (RBI) attracted attention in 2024 for its crackdown on microfinance institutions, gold financiers, and several banks, including Kotak Mahindra. The RBI focused on issues related to loan disbursal and regulatory non-compliance. The central bank’s actions were seen as part of a broader effort to maintain financial system integrity and reduce systemic risks.
Adani-Hindenburg Case
After a tumultuous 2023, the Adani Group faced renewed scrutiny in 2024, as Hindenburg Research returned with fresh allegations. The short-seller accused SEBI’s chairperson of a conflict of interest, suggesting insufficient investigation into Adani Group companies. SEBI denied these claims, and the market reacted to the turbulence in Adani stocks, although broader indices remained relatively unaffected.
IPO Market: A Record Year
2024 witnessed a record number of IPOs, with Indian companies raising a staggering Rs 1.6 lakh crore, with a 31% average listing premium. The consumer, auto, and IT sectors led the way, and small- and mid-cap IPOs garnered significant attention, reflecting the broader market rally. The SME segment saw a surge, with the amount raised increasing from Rs 1,900 crore in 2023 to over Rs 8,600 crore in 2024.
Large-Caps Underperform
Despite a strong year overall, large-cap stocks lagged behind the broader market. The Nifty 50 delivered returns of 9.5%, much lower than the 19.42% rise seen in 2023. Several high-profile companies such as Reliance Industries, HUL, and Kotak Mahindra Bank saw negative returns, contributing to the underperformance. In contrast, 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 monetary policy changes also influenced global markets. The Fed started easing interest rates in 2024, cutting them three times during the year. The market reacted to President-elect Donald Trump’s tax plans, which posed risks to inflation and could lead to higher tariffs. Despite expectations for more rate cuts, the Fed’s hawkish stance in December, limiting cuts to two in 2025, sent shockwaves through the markets.
The Indian market, along with global indices, responded to these developments, with IT and pharma stocks benefiting from a weakening rupee.
Stock Market In 2025
2024 was a year of mixed outcomes for the Indian stock market, with policy shifts, election surprises, and sectoral trends driving volatility. While large-cap stocks lagged, mid- and small-cap stocks thrived, and foreign investor activity had a notable impact. As we move into 2025, the evolving global and domestic landscape will continue to shape the market’s trajectory.