2024: Market Trends And Lessons That Shaped The Year

2024 saw persistent inflation, FII (Foreign Institutional Investor) outflows, geopolitical uncertainties, general election outcomes, and subdued earnings. But what remained consistent like the previous years was the changing market dynamics that shaped many portfolio decisions in 2024. So, what changed during the year? Let’s look at the bigger picture through the following market elements:

1. FII Outflow Trend:

In 2024, Foreign Institutional Investors (FIIs) took a cautious approach, becoming net sellers for 7 out of 11 months. Being net sellers means they sold more stocks than they bought, which led to a net outflow of Rs.2,87,235 crores by November 2024. This cautious stance was driven by a global risk-averse environment and uncertainty. 

Source: ET

The outflow had a clear impact on market sentiment, especially in the latter half of the year. This situation highlighted the importance of watching global events closely, as the uncertainty from global markets can directly affect Indian markets. 

2. DII Net Buying Trend:

Domestic Institutional Investors (DIIs) played a crucial role in supporting the market in 2024. Their consistent buying throughout the year helped balance out the pressure from FII outflows. By November, DII net buying reached Rs.4,93,243 crores. This showed how important domestic stability is for maintaining market balance. For long-term investors, it highlighted the value of DII support during times of global uncertainty, as they can provide a cushion against external market pressures by providing a stable source of demand in the market, especially when foreign investors are pulling out.

3. The IPO market of 2024:

India’s IPO market made history in 2024. By December 2024, 298 companies went public, raising a massive Rs.1,40,600 crore—139% more than the previous year. Retail investors played a big part in this growth, driving a rise in both mainboard and SME listings. 

Source: Business Standard

India led the APAC IPO market, with 214 companies going public, largely due to a surge in SME IPOs. Big names like Hyundai, Swiggy, and NTPC Green were key players in this boom. Looking ahead, GlobalData forecasts that IPO activity in 2025 could exceed 2024’s levels, thanks to a strong pipeline. However, the market’s performance will depend on factors like Fed rate decisions and the stability of other emerging markets.

4. Primary Indices Growth:

2024 was a year of volatility, with the bulls and bears battling it out, driven by global economic data and geopolitical tensions. Despite all the uncertainty, Indian markets held their ground and delivered solid returns.

On 27th September, the BSE Sensex hit a record high of 85,978.25, and the NSE Nifty also reached a lifetime high of 26,277.35. This was a significant milestone, marking the ninth consecutive year of gains for the Indian equity market.

Even with a challenging final quarter, the market wrapped up the year strong. Midcap and smallcap stocks led the charge, delivering impressive returns to investors. As of 30th December 2024, the NIFTY posted a return of 9.97%, while the Sensex gave 9.33%. The NIFTY Midcap 100 was even more impressive, growing by 23.62%, and the NIFTY Smallcap 100 climbed further to a return of 23.86%.

5. Sectors Giving The Best And Worst Returns:

Source: Money Control

In 2024, sector performance gave investors key insights into where growth could be found. The Nifty Media index was the only major sector to close negative, down by 23%. On the other hand, sectors like Realty, Pharma, and Consumer Durables performed well. The IT sector, which had been struggling, began showing signs of recovery, helped by easing global market pressures. 

This shows that while sectors face ups and downs, they tend to go through cycles of both good and bad times. Investors who stay patient and focus on the right sectors can better position themselves to take advantage of these trends.

So What Do We Learn From 2024 Market Trends?

• Be Patient With The Market  

After reaching new highs in September, the market dropped sharply in October and November due to heavy FII selling. This serves as a reminder that the stock market has its ups and downs. Patience is essential in these times of uncertainty.

• Diversification Shields Portfolios  

With geopolitical tensions and economic uncertainties in 2024, diversification proved to be crucial. Investors who spread their investments across various sectors and asset classes were better positioned to handle market volatility. A long-term, disciplined approach was vital in navigating challenges.

• Stick to the Basics  

The market’s fluctuations in 2024 highlighted the importance of investing in companies with strong fundamentals. Even during market crashes, businesses with solid foundations held their value, providing a safe haven for patient investors.

• Resilience Leads to Success  

Market volatility is inevitable, but staying resilient and adapting to changes is key—investors who stayed committed to their long-term goals and remained disciplined outperformed in 2024. Thorough research and disciplined investing can help investors prepare for both good and bad market phases.

Bottomline:

2024 was a year that demanded smart decisions and flexibility. Investors who paid attention to sector trends and adapted their strategies to global changes were in a better position to handle market challenges. Diversifying portfolios also gave a significant edge. The year showed us that while it’s important to be cautious, opportunities are always there for those ready to adjust to the shifting market.

FAQs