Sensex jumps 25% past year. Can it go beyond 84,000 in fiscal 2024-25?

The BSE Sensex has had the second-largest rise of 24.85% during the span of five years in FY24; the largest gain of 68.01% was recorded in FY21. The S&P BSE Sensex saw a mere 0.72% rise in FY23. 

“The Sensex has been displaying an upward trend since 2016, characterised by a consistent formation of higher highs. Since the COVID-19 low, the index has experienced a remarkable increase of 187%. In the recent financial year 2023-24, the index recorded a 25% increase, with 9 out of 12 months ending positively,” said Kapil Shah, Technical Analyst, Emkay Global and Technical Trainer, Finlearn Academy.

Market experts believe FY24 was an outstanding year for the Indian stock markets, with the BSE Sensex seeing an incredible rise of about 24%, outperforming prior years’ performance and generating investors with substantial wealth.

This growth outpaced that of many global counterparts, showcasing the market’s resilience and strength, pointed out Vinit Bolinjkar, Head of Research, Ventura Securities Ltd.

Also Read: FY24 market review: 120 stocks from Nifty 500 gave multibagger returns, 55 in the red; check list of top gainers, losers

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BSE Sensex – What led to the bullish trend?

Market experts believe that a number of possible triggers, including strong economic growth and solid corporate results, contributed significantly to the bullish trend and boosted investor optimism. Moreover, strong inflows from both domestic and foreign institutional investors, further supported market sentiment over the year.

Bolinjkar highlighted another factor that contributed was the IPO market, which flourished during FY24, witnessing a surge in activity with approximately 75 new issues launched. Companies like the Indian Renewable Energy Development Agency (IREDA), Netweb, and Signature Global delivered returns of over 150% post-listing, contributing to the market’s bullish sentiment. The average listing gain saw a notable increase to 29%, underscoring investor enthusiasm for these new offerings.

CA Rakeshh Mehta, Chairman – Mehta Equities, Mehta Group, stated that the fiscal year 2024 witnessed a blend of volatility and significant recoveries from market downturns. 

Mehta explained by saying that if we delve into the past 12 months, we began at around 59,000 Sensex levels and currently stand at approximately 73,651 Sensex levels, marking a year-on-year return of roughly 24%. Despite experiencing 8–10 declines every other month, the market remained resilient, buoyed by the confidence of domestic investors in our economic strength and growth prospects. This confidence led to consistent market recoveries and new highs.

Also Read: FY24 Stock Market Recap: BSE PSU index gains 92%, 37 stocks surge over 100%; check top gainers

Sensex stocks performance in FY24

As per data available on Trendlyne, out of the 30 stocks, 28 ended with gains on the last day of the financial year 2024. Tata Motors Ltd led the 30-share BSE Sensex pack, which turned into a multibagger stock in FY24, with gains of 147.2%. The others that followed the gainers list were NTPC Ltd (up 95.2%), Larsen & Toubro Ltd (up 76.4%), Mahindra & Mahindra Ltd (up 70.3%), Power Grid Corporation of India Ltd (up 66.2%), Sun Pharmaceutical Industries Ltd (up 64.7%), Bharti Airtel Ltd (up 64.2%), Maruti Suzuki India Ltd (up 53.5%), and Titan Company Ltd (up 52.1%), among others. The two laggards in FY24 were Hindustan Unilever Ltd (down 8.8%) and HDFC Bank Ltd (down 8.4%).

Also Read: Nifty 50 to Sensex: Why Indian stock market outshined gold returns in FY24? Explained with 5 crucial factors

BSE Sensex Sectoral highlights 

Bolinjkar explained that while the overall market performed exceptionally well, specific sectors emerged as standout performers. The BSE Realty index, for instance, experienced an astonishing surge of 130%, accompanied by significant gains in Power (83%), Capital Goods (75%), and Auto (72%). Such impressive performance reflects a high level of investor confidence in these particular industries.

“The realty sector performed exceptionally well, followed by Cabonex at 114% and CPSE at 100%. On the other hand, the bank, fast-moving consumer goods (FMCG), and utility sectors were the laggards, with gains of 15%, 17%, and 21%, respectively, ” added Kapil Shah.

Looking ahead to fiscal year 2025 (FY25) 

Market experts predict that the optimistic trend in the Indian financial markets will continue into the fiscal year 2025, with volatility mostly being triggered by events happening around the world. It is believed that strong participation from domestic investors, including retail investors, HNIs, and DIIs, would support the markets.

Mehta highlighted that as of now (March 28), FIIs are net sellers, with an outflow of -16,200 crores, while DIIs are net buyers, with a positive inflow of more than +2,20186 crores.

“FY24, in my opinion, is the start of a multi-year Bull Cycle for Indian equities. The famous march to hitting the $12tn economy has only just begun, and we will see much more of the financialisation of Indian families. The outlook for Indian equities in FY25 appears promising, supported by various factors such as economic recovery, stable government(fingers crossed), increasing focus on reforms, and increasing foreign investments.

However, it is crucial to remain vigilant and monitor potential risks, such as global financial conditions and domestic policy changes, as they can significantly impact the Indian equities market,” said Mohit Gulati, CIO & Managing Partner of ITI Growth Opportunities Fund.

Also Read: FY24 Review: Gold price continues to glitter amid geopolitical concerns; outlook bullish for FY25

Technical Views 

Several domestic factors, including the budget and the election, are expected to make the upcoming financial year volatile, according to analysts. Many other countries are also having elections this year, which will probably add to the already high level of volatility. From a price and time perspective, the index is currently in an extended zone.

According to Kapil Shah, from a technical standpoint, the Sensex is at a trend line resistance that has been in place since 2008. However, there are no indications of bearishness yet. From a broader perspective, the index will remain bullish above the immediate base of 62,000. The index has an immediate hurdle at 74,600. Moving above the 74,600 level can lead to further improvement up to the 77,500 and 82,300 levels.

Similarly, Mehta said that while volatility is expected to increase, he does not foresee any major corrections in the next three to four months, although periodic profit booking attempts may lead to a 3-5% downside risk.

“Our outlook for the Sensex is optimistic, with an expected return of around 12–15% (82,500–84,700) in the best-to-medium-case scenario and a potential downside of 5% (69,950) in the worst-case scenario,” added Mehta. 

Also Read: 1:2 stock split: Multibagger SME IPO turns ₹1.26 lakh to ₹6.15 lakh in 7 years

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 30 Mar 2024, 02:35 PM IST