Top Events That Shaped the Indian Stock Market in 2024

The Indian stock market, often seen as a barometer for the country’s economic health, has witnessed several key events in 2024 that have influenced its trajectory. From policy shifts and global economic trends to corporate earnings and market sentiment, each of these moments has played a crucial role in shaping the market’s landscape. Here’s a look at some of the most significant events that impacted the Indian stock market in 2024.

1. The 2024 General Election

Undoubtedly, one of the most significant events in 2024 that influenced the Indian stock market was the General Election. Held in April-May 2024, the election decided the political direction of the country for the next 5 years. The outcome of the general elections in 2024 directly impacted investor sentiment. Here’s how the market reacted to the election:

• Pre-election Volatility: As the election approached, markets witnessed heightened volatility due to uncertainty. Investors were cautious, with a sharp eye on opinion polls, political alliances, and potential post-election scenarios.
• Results and Market Reactions: The Sensex and Nifty saw substantial upticks in certain sectors like defence, infrastructure, and public sector banks, as they were expected to benefit from government policy changes and infrastructure spending.

2. Surge in Infrastructure Investments

Post-election, the Indian government doubled down on infrastructure and manufacturing. In 2024, increased government spending on infrastructure became a major theme. The government’s commitment to building more roads, railways, and smart cities, along with the push for Atmanirbhar Bharat (Self-Reliant India), made sectors such as construction, steel, and cement major beneficiaries.

With infrastructure projects getting a boost, companies in steel production, cement manufacturing, and related sectors saw significant gains. Companies like JSW Steel, UltraTech Cement, and Shree Cement were among the top performers. During Q1 FY25, the performance of the steel sector surpassed the levels for this period in any fiscal year. During the quarter, crude steel production reached 36.61 million tonnes (MT), finished steel production clocked 35.77 MT, and finished steel consumption hit 35.42 MT.

3. Global Headwinds and Rising Oil Prices

The Indian stock market reacted heavily to global economic conditions across 2024. A rise in global oil prices, due to geopolitical tensions and supply disruptions, played a crucial role in influencing the market. India’s dependence on imported oil means that higher oil prices typically hurt its fiscal deficit and inflation.

The surge in crude prices impacted stocks like Reliance Industries, ONGC, and Indian Oil Corporation, making them a key focus for investors. On the flip side, companies that benefited from high oil prices, like Bharat Petroleum and Hindustan Petroleum, saw some improvement in their margins.

4. Technology and Start-up Boom: India’s Digital Revolution

The Indian technology sector remained one of the most vital contributors to stock market growth. 2024 saw a major resurgence in tech stock valuations, driven by the digital transformation of the Indian economy. With the government’s emphasis on Digital India and the growth of sectors like artificial intelligence, cloud computing, and e-commerce, tech giants like Infosys, Tata Consultancy Services (TCS), Wipro, and HCL Tech continued to perform well.

• Startups and IPOs: The start-up ecosystem continued to flourish with several new IPOs, and many tech companies went public for the first time. The surge in fintech, healthtech, and edtech saw an influx of investor capital in these high-growth sectors.
• AI and Automation: The rise of Artificial Intelligence, fueled by investments and government initiatives, turned the spotlight on IT services and automation stocks, with companies developing AI-based products and services gaining significant market attention.

5. Monetary Policy and RBI’s Rate Actions

The Reserve Bank of India (RBI) played a pivotal role in shaping market expectations in 2024. In response to inflationary pressures and global economic developments, the RBI continued to adjust interest rates. A tight monetary policy in the 1H of the year followed by an easing stance post-elections, directly influenced the banking sector and financial markets.

• Banking Stocks: In the recent MPC, RBI changed its policy stance to ‘neutral’ from ‘withdrawal of accommodation’. Banks such as HDFC Bank, ICICI Bank, and State Bank of India gained momentum.
• Inflation Concerns: Although inflation came under control by mid-2024, it remained a concern for investors, especially in sectors sensitive to commodity prices, such as agriculture and FMCG.

6. The Surge in IPO Activity

2024 witnessed a dramatic increase in Initial Public Offerings (IPOs), as companies sought to tap into the bullish sentiment and raise capital to fuel their growth ambitions. In 2024, the IPO market in India has been buzzing, with the BSE IPO Index rising 34.83%.

The IPO market was particularly strong in the tech and consumer goods sectors, with several new-age companies debuting on the stock exchanges. The IPO boom provided opportunities for both retail and institutional investors, with many high-profile listings receiving an overwhelming response.

Conclusion

The Indian stock market in 2024 was shaped by a mix of domestic political events, government reforms, global economic challenges, and sectoral developments. The General Election played a pivotal role in determining investor sentiment, with market performance directly tied to the political stability that followed.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.