The Indian stock market, as represented by the Nifty50, experienced a robust year in FY24, ending with a noteworthy gain of nearly 29%. Additionally, the Nifty Smallcap 100 and Nifty Midcap 100 indices outperformed expectations by surging 70% and 60%, respectively, showcasing the strength of the mid and small-cap segments in the market.
Despite facing intermittent volatility, the Indian stock market remained strong and exhibited resilience throughout the financial year 2023-24. This strength was attributed to various factors such as strong inflows from mutual funds and foreign portfolio investors, coupled with global uncertainties including rising bond yields, geopolitical conflicts, and a US banking crisis. The market's performance was further bolstered by robust economic growth and moderate oil prices, which enhanced India's position among its global peers.
The upbeat sentiment in the Indian stock market was reinforced by the dovish stance of the US Federal Reserve towards the end of the fiscal year and the anticipated political stability following the Bharatiya Janata Party's victory in key state elections. Analysts and market participants are optimistic about the upcoming financial year, citing stable macroeconomic factors, a resilient banking sector, and minimal corporate leverage as positive indicators for India's stock market in FY25.
In terms of sector performance, realty and public sector enterprises (PSUs) emerged as the top gainers in FY24, with their respective NSE indices soaring by significant margins. While large-cap stocks are currently in focus due to premium valuations of midcap stocks, analysts suggest a positive outlook for the stock market in the coming year despite potential challenges. Additionally, specific stocks like Tata Motors and Bajaj Auto witnessed substantial gains, while others like UPL faced declines, leading to changes in the composition of the Nifty index.