BULLS MAY STAY PUT IN THE RING

Indian stock markets returned around 20% in 2023, and experts see this trend continuing in the new year

- JOYDEEP GHOSH

THE PARTY ON DALAL Street is going on in full blast and the lights aren't expected to dim anytime soon. Consider this: The Indian stock markets returned around 20% in 2023 the fourth highest in the past decade - and experts see this trend continuing in the new year.

Both domestic institutional investors (DIIs) and foreign portfolio investors (FPIs) contributed almost equally to the surge-1.8 trillion and 1.7 trillion ($21 billion), respectively. This is in sharp contrast with 2022, when DIIS did all the heavy lifting by investing ₹2.7 trillion, as FIIs pulled out ₹1.2 trillion ($17 billion). This gives experts such as Shankar Sharma hope about the future. The founder of GQuant says he remains optimistic about the direction of the market irrespective of flows from foreign portfolio investors (FPIs). "We have seen that happen in the last few years when FII outflows T YE AH 20 happened, but nothing really affected the market." The returns from Sensex and Nifty stocks in 2022 were subdued at 4.4%; in fact, the real returns (after adjusting for consumer price index-based inflation) were in the negative.

The good news in 2023 was that the broader market gave handsome real returns of over 12%, leading to a surge in investor wealth. The market capitalisation has risen to 364 trillion and more than trebled in the last decade.