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The Indian stock market experienced a remarkable year in Samvat 2080, with the Nifty 50 index reaching an all-time high of 26,277 on September 27, 2024. This surge was driven by a confluence of positive factors, including continued optimism about the Indian economy, strong earnings growth by Indian companies, significant inflow of foreign institutional investor (FII) equity, the upcoming general election, and events like the Cricket World Cup tournament. These factors collectively boosted market sentiment.
The past 12 months saw impressive rallies across major indices, with the Nifty 50, Nifty Midcap 100, and Nifty Smallcap 100 indices surging by 27%, 45%, and 42%, respectively. While external factors like geopolitical tensions did impact market performance, strong domestic institutional investor (DII) flows and active participation by retail investors kept the market buoyant. India's demat account count crossed the 171 million mark in August 2024, reflecting a surge in retail investor participation and contributing to record-high Systematic Investment Plan (SIP) inflows. The impressive DII flows, totaling $40.8 billion over the first nine months of calendar year 2024, surpassed the entire year 2023 flows of $22.3 billion.
While Samvat 2080 has concluded, Samvat 2081 promises to be equally exciting, with several key events to watch. The US General Elections in November 2024 will be a significant factor. The Federal Reserve's announcement of rate cuts, with two more cuts anticipated in 2024, will be closely observed, as will the Reserve Bank of India's (RBI) rate cut announcement, which could bring relief to the banking and non-banking financial company (NBFC) sectors facing tight liquidity conditions. Furthermore, the Bharatiya Janata Party's (BJP) third consecutive win in Haryana's state assembly elections has heightened expectations for the party in upcoming elections in Maharashtra, Jharkhand, and Delhi. The BJP's electoral performance will have a significant impact on market sentiment and investor confidence.
In October 2024, key indices displayed a flattish performance, primarily due to FII outflows from Indian bourses and a shift towards Chinese markets, driven by attractive valuations and strong stimulus announcements. However, investors are viewing this correction as a positive opportunity to build diversified portfolios at better valuations, capitalizing on India's long-term structural growth story. During fiscal years 2024 and 2025, several themes emerged in the Indian economy, presenting attractive investment opportunities. These themes include Power Infrastructure Expansion, Waste Water Management, a robust Defence order book, Railway infrastructure expansion, Telecom 5G rollout, the Semiconductor Production-Linked Incentive (PLI) scheme, Solar and Wind power generation, and more.
Source: Muhurat Trading 2024: HDFC Bank, ITC, Tata Tech among 11 top bets for Samvat 2081 with 15-20% upside