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Catch the Bull: Riding High into 2024!

As the final trading session of the historic year 2023 unfolded, profit-taking became the theme, marking a temporary halt to the exuberant five-day winning streak. The 30-share Sensex witnessed a marginal dip of over 170 points, settling at 72,240.26, while the Nifty, notching a loss of 47.30 points or 0.22 per cent, concluded at 21,731.40.

Despite the lackluster conclusion to an electrifying year, characterized by substantial gains in the smallcap and midcap segments, market enthusiasts remain undeterred in their optimism. Forecasts for 2024 paint a positive picture, with expectations of continued stock market advancement and the prospect of reaching new lifetime highs.

Investors are looking forward to robust Foreign Portfolio Investment (FPI) inflows, particularly as the US Federal Reserve and other central banks initiate interest rate cuts. The stability of the government at the Centre is also anticipated to be a driving force behind the continuation of the bull run in the markets.

The year 2023 witnessed the Sensex scaling new heights, registering an impressive surge of 11,399.52 points or 18.73 per cent – the second-best performance after the remarkable 2017, when it skyrocketed by nearly 30 per cent. Simultaneously, the Nifty recorded a growth of slightly over 20 per cent during the year, compared to a 30.28 per cent gain in 2017.

One of the distinctive features of the market’s performance was the clear outperformance of small and midcap stocks. This was evident in the S&P BSE smallcap gauge, which surged by 13,746.97 points or 47.52 per cent, while the midcap index added 11,524.72 points or 45.52 per cent. These gains in the midcap and smallcap segments contributed significantly to the addition of a whopping Rs 81.90 lakh crore to investor wealth over the course of the year.

Reaching a historic milestone, the BSE crossed the $4 trillion mark for the first time on November 29, underscoring the market’s resilience and attractiveness. The overall market capitalization of all listed companies on the bourse witnessed a staggering increase of Rs 81.90 lakh crore, soaring to an all-time high of Rs 364.28 lakh crore.

Even in the face of volatile behavior from foreign portfolio investors (FPIs), the stock market emerged triumphant in 2023. FPIs, initially net sellers in the first two months of the year, transitioned to a buying mode for the subsequent six months. Following a brief resumption of selling activities for two months, FPIs returned as net buyers in the final two months of the calendar year.

Market analysts attribute this record-breaking run to the trust placed by retail investors in mutual funds, coupled with a resilient economy and sound corporate earnings. The recent electoral victories of the BJP in three states, combined with guidance from the US Federal Reserve signaling three cuts in 2024, injected a booster dose of optimism into the equity markets.

Mahavir Lunawat, Managing Director of Pantomath Capital Advisors Pvt Ltd, emphasized the positive trajectory of Indian corporate earnings, driven by factors such as softened commodity prices, resulting in improved profitability and margins. Lunawat expressed confidence in the sustained strong performance of companies in the upcoming quarters, fueled by a robust domestic demand environment, positive macroeconomic factors, and the revival of private capital expenditure.

The BSE Sensex, making gains in eight out of twelve months, reached its pinnacle on December 28, hitting an all-time high of 72,484.34. This remarkable feat followed a 52-week low of 57,084.91 recorded on March 20. Prashanth Tapse, Senior Vice President (Research) at Mehta Equities, acknowledged the potential for sporadic bouts of profit-booking but highlighted the bullish undertone prevailing in the market. Tapse attributed this optimism to strong macroeconomic factors and renewed FII (Foreign Institutional Investor) buying, especially in response to declining US bond yields.

As the market turns the page on an exceptional year, investors eagerly anticipate what lies ahead in 2024, confident that the upward trajectory is set to continue, providing opportunities for growth and prosperity.

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