- Domestic investors (DIIs) drove market resilience amid global uncertainties.
- Narrative stocks like Railways, Defence, and PSUs initially soared but faced corrections.
- Liquidity and strong domestic inflows kept markets buoyant despite global challenges.
The Indian stock market in 2024 experienced sharp fluctuations, yet resilience emerged as a key theme. Domestic investors (DIIs) became the new force driving the market as Foreign Institutional Investors (FIIs) pulled back due to concerns over geopolitical tensions and slowing global growth.
Despite these challenges, sectors driven by narratives, such as Railways, Defence, and PSUs, saw strong stock performances, but the exuberance was often tempered by profit-booking and geopolitical instability.
Liquidity, Sectoral Shifts, and the Rise of Domestic Investors: A 2024 Market Recap
Meanwhile, liquidity continued to play a crucial role in supporting the market. Record inflows through vehicles like SIPs, NPS, and EPF were pivotal in maintaining the upward momentum. The Indian market showcased its ability to absorb external shocks, with the domestic focus on liquidity and investor sentiment remaining at the core of performance. As we head into 2025, many are optimistic that this resilience will continue despite the global economic landscape’s uncertainty.
The broader market’s performance showed a lopsided trend, with many stocks underperforming relative to the benchmark. In the U.S., the S&P 500’s 24.5% gain in 2024 was largely driven by a few tech giants, leaving much of the broader market trailing. However, analysts pointed to opportunities in underperforming stocks, such as Pfizer, which experienced a decline but had strong growth prospects in the future due to its drug development pipeline and commitment to dividends.
Investor sentiment was also shaped by global market conditions. Despite challenges like a stronger dollar, rising geopolitical risks, and global recession fears, the Indian market navigated through these factors, led by the robust inflows from domestic sources. This suggests a shift towards greater reliance on local investors rather than external market forces, marking a defining characteristic of India’s stock market in 2024.
In conclusion, 2024 was a year of contrasts for the stock market, with resilience fueled by domestic investors and abundant liquidity. Despite global headwinds and sector rotations, the Indian market’s ability to adapt and grow signals positive momentum into 2025, even as challenges remain.
“The primary factor driving the market now is liquidity.” — Deepak Ramaraju
