2024 Market Recap: A Roller Coaster Year for Investors!
Discover key insights from our 2024 market recap, including election impacts, geopolitical tensions, and major IPOs. Learn what influenced market trends and gain insights into what to expect in 2025.
As we wave goodbye to 2024, it's time for a thrilling recap of a year that kept investors on the edge of their seats! From nail-biting elections to volatile markets, let’s dive into the highs and lows that defined the year.
Election Fever: A Global Influence on Markets
India’s General Elections – A Double Budget Year
India’s political landscape took center stage in 2024, with elections sparking significant market interest. Investors love stability, and the government attempted to balance economic growth with voter-friendly reforms.
Key Budget Highlights:
- February 2024 (Pre-Election): Relief for middle-class taxpayers with revised income tax slabs and an increased standard deduction under the new regime.
- July 2024 (Post-Election): Changes to capital gains taxes included a slight increase in STCG and LTCG taxes on equity, while LTCG tax on real estate was reduced, albeit with the removal of indexation benefits.
Trump Triumphs in the U.S.
Donald Trump’s victory in the U.S. Presidential Elections shifted global investment flows. His pro-America policies, focused on domestic manufacturing and job creation, led to a bullish sentiment in U.S. markets.
The result? Foreign portfolio investors (FPIs) pulled out significant amounts from Indian equities, causing net outflows of Rs 1,14,446 crore in October and Rs 45,974 crore in November. Despite this, domestic retail investors held their ground, fuelling SIP inflows of Rs 25,320 crore in November, up from Rs 18,838 crore in January.
Geopolitical Tensions: Markets on Edge
2024 was marked by persistent geopolitical unrest. The Russia-Ukraine war continued to disrupt global trade, while the Israel-Gaza conflict raised fears of escalation in the Middle East.
- Impact on Oil Prices: Despite these tensions, crude oil prices remained relatively stable. This provided much-needed respite for India, where fuel prices stayed consistent, mitigating inflationary pressures.
- Supply Chain Concerns: While global conflicts didn’t spiral out of control, they left investors wary about supply chain disruptions, particularly in oil and commodities.
Wars are never good for global stability, and 2024 was a testament to how quickly investor sentiment can turn under the cloud of conflict.
Interest Rates: Controlling the Pendulum
Inflation, the ghost of 2022, was finally tamed in 2024. India’s inflation rate hovered in the manageable range of 4-6%, thanks to proactive measures by the Reserve Bank of India (RBI).
- Global Trends: The U.S. has begun to lower its rates, but India has yet to follow suit, leaving investors guessing about the next moves.
- Investor Sentiment: While high interest rates kept inflation under control, concerns over slowing economic growth emerged as a potential headwind for 2025.
IPO Frenzy: Chasing the Golden Ticket
The IPO market has been hotter than ever, with 90 major IPOs and a whopping 245 SME IPOs launched in 2024. While some see IPOs as a shortcut to riches, savvy investors know it’s not a guaranteed win and requires careful consideration.
Gold Vs. Stocks: A Tale of Two Asset Classes
Gold shone brightly in 2024, delivering 20% returns as investors sought safety amidst market volatility. Prices hovered around Rs 7,800 per gram, contrasting with cooler stock market performance—a reminder of their inverse relationship.
2024 in Numbers: The Year at a Glance
- Nifty 50: Up 9% over the year, reflecting investor resilience despite a volatile last quarter.
- BSE Sensex: Peaked near 86,000 in September before sliding 9% to close at 78,139.
Sectoral Winners
- Pharmaceuticals: A staggering 39% gain, as healthcare regained investor focus.
- Realty: Up 34%, driven by rising demand in both metros and Tier II/III cities.
- Auto: A solid 23% rise, supported by robust domestic demand.
- Metals: A modest 8% gain, recovering from global commodity price lows.
Looking Ahead to 2025 - Slow and Steady Wins the Race
Stepping into 2025, we’re looking at the investment scene a bit differently—we’re shifting from quick sprints to a steadier, long-distance run. Next year’s all about stamina and strategy. It’s about pacing ourselves, keeping our eyes on the prize, and moving with purpose.
Going forward, factors like inflation, interest rates, geopolitical developments, and the upcoming Union Budget will play big roles in shaping our market trends next year.
As we hit the ground running in 2025, let’s remember: every milestone matters, sticking to the plan pays off, and it’s all about playing the long game. We’re upbeat about the future, confident that this decade belongs to India.
On that upbeat note, we here at Team Liquide are wishing you a happy and prosperous new year. Here’s to a profitable 2025 together! 🚀🌟