Sectoral Resilience Drives Indices to Record Highs

Domestic indices reached record highs in 2024, driven by sustained optimism across various sectors, with real estate emerging as the top performer

In an impressive turnaround, foreign portfolio investors (FPIs) infused ₹1.7 lakh crore into the Indian equity markets in 2023, buoyed by their trust in the country’s resilient economic fundamentals amidst a challenging global scenario. The Indian benchmark indices ended the year 2023 with great optimism, gaining around 20 per cent during the period, whereas the start of 2024 was comparatively muted. Despite a modest decline following record highs in the first trading session of the year, the indices ended the first week in positive territory.[EasyDNNnews:PaidContentStart]

The BSE Sensex surged 1.29 per cent while the Nifty 50 recorded gains of 1.70 per cent during the last fortnight. Upbeat investor sentiment was observed in the broader markets, as evidenced by the BSE Mid-Cap index and BSE Small-Cap index rising by 5.08 per cent and 4.33 per cent, respectively. All sectoral indices were on an uptrend, except for the BSE Information Technology index, which experienced losses of around 2 per cent.

Domestic IT stocks faced pressure amidst a broader decline in global IT stocks, with investors exercising caution while awaiting the release of minutes from the US Federal Reserve’s meeting. Real estate sustained its strength, emerging as the best-performing sector, with the BSE Realty sectoral index surging by 10.74 per cent over the last two weeks. Real estate stocks garnered significant buying interest, touted as top picks for 2024 by leading brokerage houses due to their record high pre-sales, robust profitability, strong launch pipeline, and overall optimism surrounding the sector.

Stocks in the healthcare sector, particularly in diagnostics and pathology, gained strong momentum in reaction to the unexpected surge in corona virus cases nationwide. The anticipated surge in healthcare service demand in the near future propelled the sectoral index BSE Healthcare to rank among the Top Gainers, recording gains of over 5 per cent. Adani Group stocks staged a strong rebound following the Supreme Court’s rejection of demands for a CBI or SIT probe into allegations made by the US-based short-seller Hindenburg Research against Adani Group companies.

The robust rally in shares of Adani Group companies spurred a notable performance in the power and oil and gas sectors, resulting in both sectoral indices gaining over 5 per cent each. During the past two weeks, foreign institutional investors (FIIs) emerged as net buyers, while domestic institutional investors (DIIs) shifted to become net sellers. FIIs contributed a net inflow of ₹11,939 crore, while DIIs recorded a net outflow of ₹6,630 crore in the last 15 days. In recent developments, India’s current account deficit (CAD) narrowed to USD 8.3 billion in the second quarter of the fiscal year 2023-24, as reported by the Reserve Bank of India (RBI).

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