Markets bid goodbye to 2024 with impressive gains; investors' wealth soars by Rs 77.66 lakh crore

Stock market investors became richer by a whopping Rs 77.66 lakh crore in 2024, helped by an overall optimistic trend in equities, where the BSE Sensex surged over 8 per cent.

Analysts said the year witnessed a tug of war between the bulls and bears marked by volatility but, despite the uncertainties around the world, the Indian markets sustained the pressure and delivered impressive returns.

"The year 2024 has been a challenging yet rewarding one for the markets. The Nifty steadily climbed from January to September, reaching a historic high of 26,277.35, before giving up some gains to still close the year with an impressive rise. This marked Nifty's ninth consecutive year of positive returns, despite FIIs selling shares," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

The 30-share BSE Sensex jumped 5,898.75 points or 8.16 per cent this year. The BSE benchmark index hit its all-time high of 85,978.25 on September 27.

Thanks to the overall optimistic trend in equities, the market capitalisation (mcap) of BSE-listed firms surged Rs 77,66,260.19 crore to Rs 4,41,95,106.44 crore (USD 5.16 trillion) in 2024.

The market capitalisation of BSE-listed companies hit the coveted Rs 400-lakh crore mark for the first time on April 8 this year. The market cap of these firms had hit the Rs 300-lakh crore mark in July last year.

"Early in the year, a combination of anticipated inflation moderation, expected interest rate cuts, and optimism surrounding the BJP's re-election fuelled a strong rally, pushing indices to record highs. However, the election results, while favouring the BJP, fell short of a complete landslide, leading to a brief market correction.

"Subsequently, the unwinding of the Yen carry trade in August, a global phenomenon where investors borrowed in low-yielding currencies like Yen to invest in higher-yielding assets, triggered another round of volatility. Despite these setbacks, the market staged a recovery, reaching new peaks in September," Amnish Aggarwal, Director - Research, Institutional Equities, PL Capital - Prabhudas Lilladher, said.

The euphoria was short-lived, Aggarwal said, adding that a confluence of factors, including significant FII outflows in October, heightened global uncertainties following the US presidential election, and rising inflationary pressures, led to a sharp correction in the Nifty.

"While the Federal Reserve has begun cutting interest rates, recent commentary on slower and lesser cuts in 2025 has led to some disappointment," he said.

Markets came under bear attack from October onwards amid worries over foreign investors fleeing the domestic market and stretched valuations of the equities.

In October alone, the BSE benchmark slumped 4,910.72 points or 5.82 per cent.

October saw an unprecedented foreign fund outflow of Rs 94,017 crore -- the largest monthly withdrawal on record -- amid increased allocations to China, muted corporate earnings, and high valuation of Indian stocks.

"While Foreign Institutional Investors (FIIs) engaged in profit-booking due to high valuations, Domestic Institutional Investors (DIIs) consistently supported the market," Palka Arora Chopra, Director, Master Capital Services Ltd, said.

The Sensex made monthly gains in eight months this year. On a monthly basis, the Sensex gave negative returns in January, May, October and December.

Heavy retail investors' participation played a significant role in the market's positive trend this year.

Also, a number of mainboard Initial Public Offerings (IPOs) and listing of shares imparted optimism in the equity markets.

Reliance Industries is the country's most valued firm with a market valuation of Rs 16,44,792.26 crore, followed by Tata Consultancy Services (Rs 14,82,402.82 crore), HDFC Bank (Rs 13,55,520.10 crore), ICICI Bank (Rs 9,04,975.61 crore) and Bharti Airtel (Rs 9,04,583.72 crore) in the top-five order.

In 2023, the market capitalisation of BSE-listed companies climbed sharply by Rs 81.90 lakh crore. Investors became richer by more than Rs 16.38 lakh crore in 2022.