The BSE Sensex had the second largest increase of 24.85% during the duration of five years in FY24; the biggest gain of 68.01% was recorded in FY21. The S&P BSE Sensex saw only a 0.72% increase in FY23.
“The Sensex has shown an upward trend since 2016, characterized by consistent formation of higher highs. Since the downturn of COVID-19, the index has experienced a remarkable growth of 187%. In the recent financial year 2023-24, the index registered a 25% increase , with 9 out of 12 months ending positively,” said Kapil Shah, Technical Analyst, Emkay Global and Technical Trainer, Finlearn Academy.
Market experts believe that FY24 has been an outstanding year for the Indian stock markets, with the BSE Sensex seeing an incredible growth of around 24%, surpassing the performance of previous years and generating investors with great wealth.
This growth exceeded that of many global peers, demonstrating the resilience and strength of the market, pointed out Vinit Bolinjkar, Head of Research, Ventura Securities Ltd.
Also Read: FY24 market review: 120 Nifty 500 stocks gave multibagger returns, 55 in the red; check list of top winners, losers
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BSE Sensex – What led to the bullish trend?
Market experts believe that a number of potential triggers, including strong economic growth and solid corporate results, have significantly contributed to the bullish trend and increased investor optimism. Moreover, strong inflows from both domestic and foreign institutional investors, further supported market sentiment throughout the year.
Bolinjkar highlighted another factor that contributed was the IPO market, which flourished during FY24, witnessing an increase in activity with approximately 75 new issues launched. Companies such as the Indian Renewable Energy Development Agency (IREDA), Netweb and Signature Global have delivered returns of over 150% post-listing, contributing to the market’s bullish sentiment. The average listing gain saw a remarkable increase to 29%, underscoring investor enthusiasm for these new offerings.
CA Rakeshh Mehta, Chairman – Mehta Equities, Mehta Group, stated that the fiscal year 2024 witnessed a mix of volatility and significant recoveries from market downturns.
Mehta explained by saying that if we delve into the past 12 months, we started around 59,000 Sensex levels and currently stand at around 73,651 Sensex levels, marking a year-on-year return of around 24%. Despite experiencing 8-10 declines every other month, the market has remained resilient, supported by the confidence of domestic investors in our economic strength and growth prospects. This confidence has led to consistent market recoveries and new highs.
Also Read: FY24 Stock Market Recap: BSE PSU index gains 92%, 37 stocks rise above 100%; check out top winners
Sensex stores performance in FY24
According to data available with Trendlyne, out of the 30 stocks, 28 ended with gains on the last day of financial year 2024. Tata Motors Ltd led the 30-share BSE Sensex pack, which became a multibagger stock in FY24, with gains. of 147.2%. The others that followed the list of gainers were NTPC Ltd (up 95.2%), Larsen & Toubro Ltd (up 76.4%), Mahindra & Mahindra Ltd (up 70.3%), Power Grid Corporation of India Ltd (up 66.2%), Sun Pharmaceutical. Industries Ltd (up to 64.7%), Bharti Airtel Ltd (up to 64.2%), Maruti Suzuki India Ltd (up to 53.5%), and Titan Company Ltd (up to 52.1%), among others. The two laggards in FY24 were Hindustan Unilever Ltd (down 8.8%) and HDFC Bank Ltd (down 8.4%).
Also Read: Nifty 50 to Sensex: Why Indian stock market eclipsed gold returns in FY24? Explained with 5 decisive factors
BSE Sensex Sectoral highlights
Bolinjkar explained that while the overall market performed exceptionally well, specific sectors emerged as outstanding performers. The BSE Realty index, for example, experienced a staggering 130% growth, accompanied by significant gains in Power (83%), Capitals (75%) and Auto (72%). Such impressive performance reflects a high level of investor confidence in these particular industries.
“The realty sector performed exceptionally well, followed by Cabonex at 114% and CPSE at 100%. On the other hand, the banking, fast moving consumer goods (FMCG) and services sectors were the laggards, with gains of 15%, 17% and 21%, respectively,” added Kapil Shah.
Looking ahead to fiscal year 2025 (FY25)
Market experts predict that the bullish trend in the Indian financial markets will continue till the fiscal year 2025, with volatility largely triggered by events happening around the world. It is believed that strong participation from domestic investors, including retail investors, HNIs and DIIs, would support the markets.
Mehta highlighted that so far (March 28), FIIs are net sellers, with an outflow of -16,200 crores, while DIIs are net buyers, with a positive inflow of over +2,20186 crores.
“FY24, in my opinion, is the beginning of a multi-year Bull Cycle for Indian stocks. The famous march to the $12 billion economy has only just begun, and we will see much more of the financing of Indian families. The outlook. for Indian stocks in FY25 looks promising, supported by various factors like economic recovery, stable government (fingers crossed), increasing focus on reforms and increasing foreign investments.
However, it is important to remain vigilant and monitor potential risks, such as global financial conditions and domestic political changes, as they can significantly impact the Indian equity market,” said Mohit Gulati, CIO and Managing Partner of ITI Growth Opportunities Fund.
Also Read: FY24 Review: Gold price continues to shine amid geopolitical concerns; bullish outlook for FY25
Technical Views
According to analysts, several domestic factors, including the budget and the election, are expected to make the next financial year volatile. Many other countries also have elections this year, which is likely to add to the already high level of volatility. From a price and time perspective, the index is currently in an extended zone.
According to Kapil Shah, from a technical point of view, the Sensex is at a trend line resistance that has existed since 2008. However, there are no bearish indications yet. From a broader perspective, the index will remain bullish above the immediate base of 62,000. The index has an immediate hurdle at 74,600. A move above the 74,600 level may lead to further improvement to the 77,500 and 82,300 levels.
Similarly, Mehta said that while volatility is expected to increase, he does not foresee any major corrections in the next three to four months, although periodic profit-booking attempts may lead to a 3-5% downside risk.
“Our outlook for the Sensex is bullish, with an expected return of around 12-15% (82,500-84,700) in the best to mid-case scenario and a possible downside of 5% (69,950) in the worst case,” Mehta added.
Also Read: 1:2 share split: Multibagger SME IPO spins ₹1.26 lakh to ₹6.15 lakh in 7 years
Disclaimer: The above views and recommendations are those of individual analysts, experts and trading companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 30 Mar 2024, 14:35 IST