Sensex and Nifty End 2024 with Modest Gains of 8-9%
The Indian equity market, despite facing several headwinds, managed to close 2024 with a moderate gain of 8-9%. Real estate, pharma, and healthcare sectors led the rally, while Nifty Media struggled.
SensexNiftyIndian Equity MarketSectoral IndicesEconomic GrowthReal EstateDec 31, 2024
The Sensex ended the year at 78,139, gaining 8.18% from the start, while the Nifty finished at 23,658, advancing 8.76%.
Both indices had seen a significant rally, rising nearly 19% between January and September 25, but a series of headwinds, including relentless selling by foreign institutional investors (FIIs) and a weakening rupee, led to a correction of about 10% over the last three months of the year.
The broader market outperformed the benchmarks, with the Nifty Midcap and Smallcap indices delivering gains of over 20% each.
Among the sectoral indices, real estate, pharma, and healthcare were the stars, achieving gains between 33% and 41%.
On the other hand, Nifty Media faced tough times, declining by 25% in 2024.
Several Nifty50 stocks had a stellar run, with Tata Group’s Trent, Mahindra & Mahindra, and Bharti Airtel leading the pack.
However, companies like Asian Paints and IndusInd Bank were hit hard by increasing competition and saw their stock prices fall sharply.
Despite the market’s resilience against worsening geopolitical tensions, particularly in the Middle East, and the smooth absorption of general election results during the first nine months, investor confidence took a hit in Q2FY25 when corporate earnings growth slowed down.
The win by Republican candidate Donald Trump in the US Presidential election, along with its impact on the bond and currency markets, and the US Fed’s decision to go for fewer rate cuts in 2025, added to the market’s challenges.
Looking ahead, the first few months of 2025 are expected to be volatile.
The implications of Trump taking office and the Union Budget, along with the Q3 earnings, will play a crucial role in shaping the market’s trajectory.
Mohit Batra, Founder of MarketsMojo, warns that slowing economic momentum poses risks to corporate earnings growth.
“If these economic headwinds persist, sustaining current high valuations could be challenging.
Geopolitical uncertainties, including potential policy shifts in the US, may also weigh on market sentiment.
We expect the market in 2025 to be more stock-specific, with selective sectors driving performance rather than a broad-based rally.
Investors should prepare for a more challenging environment compared to the relatively straightforward gains of 2024,” Batra said.
However, Deepak Ramaraju, Senior Fund Manager at Shriram AMC, remains optimistic.
He believes that the stock market in 2025 will be driven by strong economic growth and government efforts to boost infrastructure and digital innovation.
“Sectors like capital goods, technology, financial services, consumption, and healthcare are expected to shine, with emerging areas such as semiconductors, electronics, manufacturing, renewable energy, and electric mobility grabbing more attention,” Ramaraju added.
The Indian equity market, while facing numerous challenges, has shown resilience and adaptability.
As 2025 approaches, investors and analysts are cautious but hopeful about the market's potential to deliver positive returns, driven by selective sectors and robust economic fundamentals.
Frequently Asked Questions
What was the performance of the Sensex and Nifty in 2024?
The Sensex and Nifty closed 2024 with moderate gains of 8-9%. The Sensex ended at 78,139, gaining 8.18%, and the Nifty finished at 23,658, advancing 8.76%.
Which sectors performed well in 2024?
Real estate, pharma, and healthcare sectors led the rally, achieving gains between 33% and 41%.
Why did the market face a correction in the last three months of 2024?
The market faced a correction due to relentless selling by foreign institutional investors (FIIs), a weakening rupee, and several geopolitical developments.
How did the broader market perform in 2024?
The broader market outperformed the benchmarks, with the Nifty Midcap and Smallcap indices delivering gains of over 20% each.
What are the expectations for the stock market in 2025?
The market is expected to be more stock-specific, with selective sectors driving performance. Sectors like capital goods, technology, financial services, consumption, and healthcare are expected to shine.
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