The financial year 2023-24 till date has proven to be exceptional for the markets, marked by a robust rally in indices that propelled them to reach all-time high levels. During Q1FY24, the benchmark indices, BSE Sensex and Nifty 50, experienced around 10 per cent gain, reaching record all-time highs. This surge was fuelled by strong quarter results, effective management of the El Nino event, positive developments such as the increase in industrial output, a pause in interest rate hikes, and substantial FII inflows attributed to India’s robust economic outlook among developing countries, among other factors.
In Q2FY24, there was a significant correction following a robust rally, primarily driven by foreign investors booking profits. The banking sector faced the brunt of the damage, and due to a lack of investor optimism, the indices registered marginal gains of 1-2 per cent during the period. The period of Q3FY24 experienced another strong rally, powered by revised growth projections, a remarkable surge in IT stocks following the Federal Reserve’s dovish stance on interest rate hikes, and a favourable remark by the Supreme Court regarding the Adani Group.
The Supreme Court order enhanced investors’ risk appetite, leading to a robust rally in Adani Group stocks. As a result, the indices broke previous records and reached new highs. The broader indices, namely BSE Mid-Cap index and BSE SmallCap index, meanwhile, sustained an unbroken robust uptrend, registering a rally of 45-50 per cent over the past nine months and demonstrating resilience in each quarter.
This story is from the 12 February, 2024 edition of Dalal Street Investment Journal.
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This story is from the 12 February, 2024 edition of Dalal Street Investment Journal.
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