Bears gain ground, bulls sober up

INDICES SCALED NEW HIGHS IN FIRST 9 MONTHS, RALLY LOST ITS LEGS AFTER SEPT

- AKSHATA GORDE

EARLY IN THE year a fund manager, with over three decades in the Indian stock market, lamented the art of stock picking had no value in today's market. Investors, he pointed out were making money in almost every stock. The tenets of investing for the long term and not timing the market, he felt, were useless in such markets. While he may feel somewhat vindicated by the correction in stock prices, the fact is valuations remain rich.

While 2024 has seen one of the biggest bull runs, over the past couple of months, the bears have had the upper hand. The Sensex's smart 16% return in the first nine months led investors to hope for another blockbuster year like 2023 — when the returns were 18.7%. The last three months, have however, forced them to significantly pare down their expectations.

So far in 2024, the benchmark Sensex has managed an 8.3% return —that's less half the gains seen in 2023 and about 100-150 bps more than the rate on a one-year fixed. Although the broader market, the mid-cap and small-cap indices, continue to return over 20%, even this can be considered muted compared to over 45% in 2023.