GR Exclusive: Sensex, Nifty Suge 20% To Mark 8th Consecutive Year Of Gains; What Moved The Market?

The Indian stock market has witnessed an unprecedented eighth consecutive year of record gains, with both the Sensex and Nifty 50 indices reaching new heights. This feat, a first in the history of the stock market, showcases the resilience and strength of the Indian economy.

The Sensex and Nifty 50 indices have surged by an impressive 20% each in the past year, marking their most significant gains in six years, excluding the pandemic-ridden year. The Midcap Index, demonstrating exceptional performance, has outpaced even the COVID-19 year gain, soaring by a staggering 46%, the highest since 2017.

While the Nifty Bank has recorded gains for the third consecutive year, it has relatively underperformed compared to other sectors, posting a modest 12% increase. However, the real stars of 2023 have been the sectoral indices, with Realty and PSU indices leading the pack, each witnessing an astonishing 80% surge.

Notably, all sectoral indices have posted gains in the year 2023. Among them, the Realty and PSU sectors have stolen the limelight, showcasing the highest growth rates. This robust performance is indicative of a broad-based economic recovery and investor confidence in various segments.

Remarkably, with the exception of Adani Ent and UPL, all Nifty stocks have yielded positive returns in 2023. Tata Motors stands out as the biggest Nifty gainer, doubling its value over the course of the year. Other notable Nifty gainers include NTPC, Bajaj Auto, L&T, Coal India, Hero Moto, and UltraTech.

In the midcap segment, REC and PFC have emerged as the biggest gainers, each witnessing an astounding 250% increase. Additionally, individual stocks like Aurobindo, Hind Copper, BHEL, Birlasoft, and Trent have registered gains of over 10% each, further contributing to the overall positive sentiment in the market.

The collective wealth of investors received a substantial boost, with the Nifty 50 rally adding a staggering Rs 82 lakh crore throughout the year. The market capitalisation of BSE-listed companies ended the year at Rs 364 lakh crore, a notable surge from the Rs 282 lakh crore at the beginning of 2023. The month of December alone witnessed an impressive market cap addition of nearly Rs 30 lakh crore.

Tata Motors emerged as a standout performer, becoming the first Nifty constituent to double in value on the final trading day of the year. Other notable gainers included Bajaj Auto, NTPC, L&T, and Coal India. NTPC and Coal India, buoyed by the PSU-themed rally, recorded their best calendar year performance on record.

The Nifty Smallcap index rose by an impressive 55%, also achieving its best year since 2017. A total of 93 Midcap stocks and 86 Smallcap stocks closed the year with gains, highlighting the extensive reach of the market rally.

Despite foreign investors selling Rs 14,653 crore in the cash market during the year, domestic investors played a pivotal role in maintaining market resilience. Systematic Investment Plan (SIP) flows continued to reach new highs, with domestic investors injecting a cumulative total of nearly Rs 1.7 lakh crore into the market. This robust support from domestic investors contributed to the market's ability to weather external pressures.

The journey through 2023 was anything but smooth, as investors grappled with global uncertainties and domestic challenges. FOMO (fear of missing out) became a common sentiment, driving market dynamics amid the ebb and flow of concerns such as rising COVID-19 cases in China, a Chinese economic lockdown, a hawkish Central Bank, surging bond yields, and other macroeconomic challenges.

Let's take a moment to recap the defining moments of 2023:

Adani-Hindenburg Fiasco:

The Adani Group faced turbulent times following allegations of fraud by Hindenburg Research, resulting in a sharp decline in its share prices. Adani responded by welcoming investors like GQG and Abu Dhabi's International Holding, reinforcing confidence and diluting the family's tight shareholding.

T+1 Settlement Cycle:

India adopted the 'trade-plus-one' (T+1) settlement cycle, becoming the second country globally to implement the system. This move ensures that trade settlements must be completed within 24 hours of a transaction, enhancing market efficiency.

Adani Enterprises FPO Cancellation:

Adani Enterprises unexpectedly cancelled its Rs 20,000-crore follow-on public offer (FPO) after a significant decline in its share prices. The company pledged to return the funds collected from investors.

US Banking Crisis:

Silicon Valley Bank, Signature Bank, and First Republic Bank collapse sent shockwaves across global markets, leaving billions stranded.

RBI's April 2023 Policy:

The Reserve Bank of India paused its rate hike cycle in April 2023 after six consecutive rate hikes since May of the previous year.

HDFC Ltd-HDFC Bank Merger:

HDFC Bank completed its merger with Housing Development Finance Corporation on July 1, 2023, creating a formidable entity in the financial sector.

RIL-Jio Financial Demerger:

Reliance Industries demerged its financial services business into Jio Financial Services, signalling strategic restructuring.

IPO Boom:

2023 witnessed an IPO boom, surpassing the previous year's tally. The SEBI's reduction of IPO listing timelines to T+2 days further streamlined the process.

FII Flows:

Both domestic and foreign investors demonstrated confidence in India's growth story, with substantial investments from FIIs and DIIs in the equity market.

All-Time High in December 2023:

The Nifty-50 index touched an all-time high of 21,801.45 on December 28, 2023, fueled by positive election results, RBI's stance, and a dovish US Fed.

The icing on the cake was the Indian market cap reaching $4 trillion in December 2023, making India the fifth-largest market globally, trailing only behind the US, China, Japan, and Hong Kong.

As we step into 2024, the Indian equity market appears poised for strong gains, buoyed by a robust economic outlook and substantial domestic inflows. The resilience demonstrated in the face of global challenges positions India as a formidable player in the world of finance.