Muhurta Trading 2024: Samvat 2080 was a remarkable year for Indian markets, with Nifty 50 touching an all-time high of 26,277 and Sensex reaching as high as 85,978 on 27 September 2024, led by continued optimism about the economy, healthy earnings growth by India Inc, FII Equity Events like flow, general elections and cricket world cup tournament etc. boosted the overall sentiments.
Nifty/Nifty Midcap 100/Nifty Smallcap 100 indices have gained 27%/45%/42% respectively in the last 12 months. Although the emergence of external factors, especially geopolitical tensions around the world, impacted the market performance, strong DII inflows and participation from retail investors kept the market bullish.
The total demat inflows have crossed the 171 million mark in August 24 resulting in SIP inflows reaching an all-time high. DII inflows of $40.8bn in 9MCY24 exceed inflows of $22.3bn in CY23.
Although an eventful Samvat 2080 is behind us, an equally exciting Samvat 2081 awaits which will see many major events such as the US general elections to be held in November 2024. While the Fed has announced its rate cut decision with anticipation of 2 more cuts. In CY24, all eyes are on RBI’s rate cut announcement, which may bring some relief to the tight liquidity situation of the banking and NBFC sector.
Moreover, BJP’s third consecutive victory in the state assembly elections in Haryana has raised expectations from the party in the upcoming elections in Maharashtra, Jharkhand and Delhi.
Given attractive valuations and strong stimulus announcements, major indices recorded a flat performance in the month of October mainly due to FII outflows from Indian stock markets and divergence in Chinese markets. However, investors are taking this healthy recovery as an opportunity to build diversified portfolios at better valuations to play on India’s long-term structural growth story.
During FY24 and FY25, several themes emerged in the Indian economy, such as power infrastructure expansion, waste water management, strong defense order book, railway infra expansion, telecom 5G rollout, semi-conductor PLI scheme, solar and wind power generation, Etcetera.
To take advantage of these opportunities, investors increased their exposure to multiple players across these themes, largely covered under the mid-cap and small-cap indices, leading to a significant increase in their valuations. As a result, the relative underperformance of major indices (e.g. Nifty 50/Sensex) provides a good opportunity for entry into some large-cap companies, which offer multiple growth levers and a healthy revenue visibility at current valuations.
