2024 was a challenging year for the Indian stock markets. With geopolitical tensions in the Middle East, global elections in the US, along with high inflation affecting India, the markets witnessed a lot of volatility. 

While Foreign Institutional Investors (FII) pulled out more than ₹3,00,000 crores throughout the year, the domestic investors stepped in with record inflows of more than ₹4,90,000 crores. This shift highlighted the growing confidence of Indian investors in their economy. 

The year also brought major milestones. A record number of IPOs hit the market (over 90), attracting capital and creating new opportunities for investors. Systematic Investment Plans (SIPs) reached an all-time high of ₹25,320 crore in November, reinforcing the steady rise of disciplined, long-term investing in India. 

On the economic front, India recorded an 8.2% GDP growth, driven by robust manufacturing and a steady recovery in consumption. Policy decisions, from fiscal spending to tax reforms, played a pivotal role in shaping investor sentiment, underlining the importance of government action in maintaining economic momentum.

As 2024 ends, it showed the strength and maturity of India’s markets and reminded investors of the importance of patience and resilience. 

Let’s look at how the Indian markets fared in 2024.

Performance and Trends of Nifty Indices in 2024

Nifty Performance 2024
Indian Indices Movement 2024

What was the performance of Nifty 50 in 2024?

Nifty 50 recorded around 8% increase this year. It began the year at 21,727 and climbed to a high of 26,277, marking a 21% gain at its peak on September 27th.

In the first half of the year, Nifty experienced several pullbacks but consistently respected its 50-day moving average. However, on June 4th, Nifty dropped sharply by 5.93%, reacting to unexpected election results. Despite this setback, it quickly recovered in the subsequent days, maintaining its upward trajectory until September 27th, when it peaked and shifted its trend.

Following the peak, Nifty declined by 11% over the next two months, reaching a low of 23,264 before finding support near its 200-day moving average. A short rally in December provided some optimism, but the momentum faded. Eventually, Nifty fell below its critical 50-day moving average, signaling further weakness.

How Has Nifty MidCap 150 Performed in 2024?

Nifty Midcap 150 index had a dynamic year, achieving a 22% return while navigating sharp fluctuations and remarkable recoveries. Here’s a closer look at its performance:

The index achieved a high of 21,515, driven by a robust mid-year rally, before sharply dropping to its low of 16,066, testing investor confidence. These extremes highlight the index’s resilience and ability to recover despite challenging market conditions.

The 200-day moving average (DMA) acted as a critical support level:

The index touched its 200-DMA once, during a major decline in November.

The 50-day moving average acted as crucial support during small pullbacks, indicating that the index is experiencing minor corrections while maintaining an upward trend.

The year started with a steady uptrend, culminating in the mid-year highs. However, a trend shift occurred around November, as selling pressure drove the index to lower highs and a correction to 19,956. Toward the end of November, the index rebounded sharply, reclaiming key levels and signaling renewed investor confidence.

The most significant drop occurred between September and November, triggered by global uncertainties and rising interest rates, which led to heightened market volatility.

Despite the turbulence, Nifty Midcap 150 demonstrated remarkable resilience, rallying 4% after reclaiming its 200-DMA in November. This recovery underscores the index’s ability to withstand adverse conditions and regain momentum.

How did Nifty SmallCap 250 navigate the market in 2024?

Nifty Smallcap 250 mirrored the midcap index’s movement, posting a 24% return. Particularly the index saw a remarkable recovery in November, gaining 11% in just three weeks. The index found strong support at its 50-day moving average, which continues to act as a critical support level.

How did Nifty Microcap 250 navigate the market in 2024?

Nifty Microcap 250 Index has delivered a strong performance, posting a 31% return as of December 30th. Of the 250 stocks in the index, 171 have posted positive returns, while 79 have seen negative returns. This suggests that the majority of stocks are performing well, driving the overall growth of the index.

Nifty Sectoral Performance

Pharma sector delivered an impressive 38% return, driven by India’s status as the world’s leading supplier of generic medicines by volume. Government measures, including the Production Linked Incentive (PLI) Scheme for Pharmaceuticals, have focused on reducing reliance on imports, promoting domestic manufacturing, and fostering innovation and product diversification, especially in advanced technologies like cell-based and gene therapies.

In early 2024, the realty index gained momentum, supported by political stability, government-led investment policies, and positive macroeconomic indicators. A shift in sentiment occurred after the budget announcement to remove indexation benefits and lower capital gains tax rates. To address industry concerns, the government implemented an optional framework, offering investors the choice between indexation with a higher tax rate or no indexation with a reduced tax rate. This measure helped restore confidence and strengthened the sector’s overall performance.

The chart below shows the sectoral performance in 2024.

Nifty Sectoral Indices

Asset Class Performance (2014 to 2024)

The table below highlights the performance of 8 asset classes from 2014 to 2024, from highest to lowest.   

Here are a few key observations:

  • Small Cap although a risky investment, has outperformed 5 times and given negative returns thrice  
  • Mid Cap asset performance ranged between -13.4% to 54.7% 
  • Large-cap stocks consistently avoided extreme highs or lows compared to other categories
  • G-sec and corporate bonds are considered safer assets to balance the riskier exposure from equities
  • Real estate consistently underperformed compared to other asset classes, indicating limited growth in this period
  • Gold asset performance ranged between -18% to 27.6%
  • Having exposure in international markets is for those with a higher risk appetite but the decadal returns of the asset ranged between -10% to 31.8%

This decade-long overview emphasizes the strong returns from equity exposure. Long-term investments in equities tend to appreciate in value. To manage risk, diversification into secure assets like gold, G-sec, corporate bonds, and real estate is recommended.

Asset Class Performance

Key Trends in the Indian Mutual Fund Industry in 2024

The mutual fund industry in India recorded significant growth in 2024. The net assets under management grew from ₹51 lakh crore in December 2023 to ₹68 lakh crore in November 2024. 

198 new schemes were launched up until November 2024. 

SIP accounts grew to 10.23 crore, while the monthly investments through SIP touched an all-time high of ₹25,323 crore in October 2024.

Growing Affinity of Sectoral/Thematic Funds

Sectoral and Thematic Funds are front and centre of the Mutual Funds industry due to higher past return numbers as well as new sectoral and thematic fund launches. A key trend that was observed over the past year was that gross inflows in equity mutual funds have moved towards sectoral and thematic funds.

Mutual Fund Sectoral Growth

In 2024, the share of sectoral and thematic funds in equity funds’ gross inflow increased to 30% from about 17-18% in the past three calendar years. In fact, in 2019, their share of gross inflow was just 8%.

Understanding India’s 2024 Economic Landscape: Inflation, Repo Rate, and GDP Performance

Inflation

Inflation in 2024 showed notable fluctuations. It peaked at 6.21% in October, primarily driven by increasing prices of vegetables, fruits, and oils. Increasing inflation towards the end of the year prompted concerns. However, consistent monetary policy by the Reserve Bank of India (RBI) aimed to balance inflation and economic growth.

Inflation Rate

Repo Rate

Over the past 5 years, the RBI’s monetary policy has carefully balanced growth and inflation. Between February 2019 and March 2020, it saw a steady decline to address slowing global growth and the effects of COVID-19. Between 2020 and 2022, it was at a historic low of 4% to support economic recovery and growth. 

However, from May 2022 onwards, the RBI gradually increased the rate to 6.5%, shifting to a tighter policy. The rate has remained stable since, showing RBI’s efforts to control inflation while ensuring economic growth through steady credit flow. 

Repo Rate

GDP

India’s GDP growth over recent quarters demonstrates a mix of recovery and stabilization, driven by domestic demand and strategic policy measures

The data reveals a significant rebound in 2022 and early 2023, supported by pandemic recovery dynamics and strong domestic demand. However, the slowdown in growth through late 2023 and into 2024 highlights the effects of global economic uncertainty, tighter monetary policies, and supply chain disruptions.
India’s recovery gained momentum in Q4 2023, with GDP growth at 6.2%, stabilizing at around 8% through 2024. Infrastructure investments, stronger consumption, and easing inflation drove this.

This chart shows the GDP forecast.

GDP

FII & DII Activity in 2024

The chart below reflects the net FII and DII cash flows into the markets in 2023. FII inflow was strong as they were the net sellers, while DII were net buyers.

FII & DII Activity 2024

A Thriving IPO Season

India experienced a remarkable IPO boom in 2024, with a wide range of companies making their debut on the stock exchange. 

From traditional industries to tech-driven startups, businesses across various sectors joined the capital markets. 

Over 90 mainboard IPOs raised an astounding ₹1.62 lakh crore, more than double the ₹49,436 crore raised in 2023. 

The chart below highlights the number of IPOs listed throughout the year.

IPO 2024

Conclusion

Indian markets in 2024 demonstrated remarkable resilience amidst global uncertainties, including inflationary pressures and geopolitical challenges. Domestic investors played a pivotal role in driving record inflows. Strong GDP growth, booming IPOs, and increasing SIP contributions reflected confidence in the economy, highlighting the evolving maturity and long-term potential of India’s financial landscape.