Driven by strong fundamentals and steady economic expansion, Indian benchmark indices are set to deliver positive returns in 2024 for the ninth consecutive year. Reports from leading financial institutions highlight a year of mixed performance but overall resilience in the market.
A report by Standard Chartered Bank characterized 2024 as a year of two distinct phases for Indian equities and bonds. The first half witnessed strong growth fueled by robust economic activity and solid corporate earnings. However, the second half experienced heightened volatility and market consolidation.
“2024 was a year of two halves, with H1 seeing strong performance of Indian equities and bonds driven by economic growth and corporate earnings delivery. However, H2 witnessed a surge in volatility,” the report stated.
Despite the turbulence, key indices remained resilient. The Nifty 50 index recorded a 9.21% gain, while the Sensex climbed by 8.62%, marking another successful year for the markets.
Long-Term Outperformance of Indian Equities
According to a report by Motilal Oswal, Indian equities have consistently outperformed U.S. markets over the past 35 years. Investments in the Indian stock market since 1990 have grown nearly 95 times, showcasing its long-term strength.
“If someone had invested ₹100 in Indian stock markets in 1990, it would have grown to ₹9,500 by November 2024. In comparison, ₹100 invested in U.S. stock markets during the same period would have grown to ₹8,400,” the report highlighted. Gold, another favored investment, delivered returns of 32 times during the same period.
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Motilal Oswal Wealth Management also projected a recovery in earnings for the second half of FY25. Key drivers include increased rural spending, a buoyant wedding season, and higher government expenditure.
“We expect earnings to gain momentum, delivering a 16% CAGR over FY25-27E. Moreover, the recent market correction and moderation in valuations offer an opportunity to add selective bottom-up stock ideas,” the report noted.
Optimism For The Future
The reports remain optimistic about India’s long-term growth prospects, underpinned by the strength of corporate balance sheets and profitable expansion. Analysts emphasized that despite near-term volatility, India’s economic resilience and growth trajectory provide a compelling investment case.
As the markets head into 2024, investors are encouraged to stay focused on long-term trends, leveraging opportunities arising from market corrections and valuation moderation.
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