It’s been an interesting day in the markets. In the first half of the day, or rather in the first hour, the market dived down with Nifty falling by more than 100 points. It seemed like Nifty might break out of the range we’ve been talking about. However, this was more of a fill-in, and the markets made a strong comeback in the second half, with Nifty almost closing flat. Small caps did quite well, so overall, it seems like a good end to the calendar year.

Today, we’ll discuss what the market has done in 2024, the key trends we’ve seen, and do a quick year-end roundup of market performance. A lot of people believe that the markets have come down a lot this year, while others feel that certain pockets of the market have seen significant gains. But, when we dive deeper into sector-wise and index-wise granular data, we’ll find that some of these narratives might not be entirely accurate.

Where is the market headed?

Market Overview

Nifty closed exactly flat today—something that doesn’t happen very often. The market opened with a gap down, fell, and then came back to close right where it had opened. It’s a rare doji-like candle from a closing perspective. The bulls still seem to be in charge because, despite breaking down from the long range we’ve been discussing for the past five sessions, Nifty managed to close back within that range. So, we can assume that the baby hasn’t been thrown out with the bathwater just yet.

The recent fall we saw from mid-September to November has bounced back, but this current fall seems less intense. It’s possible that the reduced intensity is partly due to the holiday season for FIIs, which we’ll know more about next week. If the pattern of staying within this range continues for a month or so, it could set up a good opportunity for Nifty to launch itself again when the time is right.

Looking ahead, January could bring disruptions, especially with the White House coming into play. A lot of uncertainties and narratives will likely lead to some volatility—not just in India but globally. Additionally, we are about a month away from the Union Budget, and there’s much speculation about possible changes, particularly around income tax slabs to boost consumption. While there’s been a lot of chatter about tax slabs being rationalized over the years, it hasn’t happened yet. So, while many have given up hope, I’m staying cautiously optimistic that there could be some pleasant surprises in store.

Nifty Next 50

As for Nifty Next 50, it mirrored Nifty’s behavior today, almost closing where it was yesterday with a slight drop of 0.11%. The market hasn’t shown much strength, and the recent bounce and fall have neutralized each other, leaving the Nifty Next 50 at a pivotal point. The 40 DMA has been tested and recovered for six consecutive sessions, so it’s quite likely that a significant move is coming. Given this narrow range, the next move—up or down—could happen soon.

Nifty Mid and Small Cap

If we look at mid-caps, the 15% gain seems relatively neutral, but they are still hugging the average for the last five sessions, suggesting some strength. Small caps, on the other hand, closed up 65% today, despite the market facing a bit of pressure.

Nifty Bank Overview

There’s a common belief that “Nifty support day” occurs towards the end of the quarter or year, but I don’t believe in such theories. Markets are driven by both buying and selling, and while institutional buying may increase, there’s also selling happening. At the start of the year, there’s usually some optimism, particularly with FII allocations and calendar year-end adjustments, which might explain the positive movements in the market in the last couple of days.

Advanced Declined Ratio Trends

Nifty Heatmap

Bank Nifty closed almost flat as well, with a minor drop of 0.18%. Momentum is also flat, slightly tilting towards the bullish side, with 310 stocks showing positive momentum versus 188 on the negative side. Energy stocks, like ONGC (+3%) and Coal India (+1.65%), saw some positive movement, and there were gains in State Bank of India (SBI), NTPC, ITC, and others. On the flip side, some big Nifty names like Bajaj Holding lost some of their recent gains, while stocks like Siemens, ABB, Hindustan Zinc, and IRCTC saw some positive movement.

Sectoral Overview

Within the sectors, public sector enterprises (PSEs) and energy stocks are leading the rally. These sectors have been hit hard in the past few months, with declines of 15-20%, but there’s some relief at the year’s end. IT stocks saw the biggest losses today, down 1.4%, but over the past three months, IT remains the only sector in the green for the year. As for the calendar year 2024, pharma (+39%) and real estate (+34%) were the standout sectors. Private banks, surprisingly, have struggled and are in the red for the year, along with FMCG stocks, which have also been flat.

Sectors of the Day

Nifty CPSE Index

On the positive side, Public Sector Enterprise stocks like ONGC, Oil India, Coal India, and NHPC have been gaining ground, possibly in anticipation of budget announcements related to divestments or other favorable measures. Oil prices have also risen, which might be adding to the optimism around these stocks. Many of these stocks have fallen significantly from their peaks and are now at a point where no sellers seem to be left.

Stock of the Day

Avanti Feeds

Despite a sluggish market, some stocks have done well, and it’s important to keep an eye on those that are bucking the trend. Avanti Feeds, for example, has been stagnating for several years, but it’s now forming a huge flag-like base, which could lead to exponential gains in the future.

Story of the Day : Recapping 2024 in Markets

From January 1, 2024, Nifty has clocked an 8.6% gain for the year, which, while positive, is not as high as people might have expected at the start of the year. The S&P 500, however, is up 24%, so focusing solely on Indian stocks might not have been the best strategy this year. Gold, on the other hand, has had an excellent year, gaining 30%. For those who allocated to gold, congratulations! Gold is often a good hedge against equity downturns, and its strong performance this year has helped balance portfolios.

In terms of specific market indices, the Nifty Midcap 150 Index and Nifty Alpha Index both clocked impressive returns of nearly 32%. On the other hand, the Nifty Next 50 delivered 26.8%, outperforming the Nifty 50, which gained only 8.6%. This highlights the importance of diversification and considering various segments of the market rather than just relying on Nifty index products.

The capital markets sector has been the best performer, with a gain of 70.9%, driven largely by brokerage stocks like BSE Ltd. The defense sector also performed well, with a 54.4% return, while pharma and real estate were the other top-performing sectors. On the flip side, sectors like infrastructure, PSU banks, oil and gas, and metals have underperformed.

Some of the top-performing stocks in 2024 included Trent (+132%), Mahindra & Mahindra, Bharat Electronics, Bharti Airtel, Sun Pharma, Shriram Finance, and Bajaj Auto, all posting strong gains between 30% and 132%. In contrast, stocks like Asian Paints (-33%), Nestlé (-21%), Tata Consumers, Titan, and Britannia saw significant losses. These underperforming stocks would have been absent from momentum-based portfolios, which illustrates the value of following strong trends.

In the Nifty Next 50, stocks like Zomato, Vedanta, Siemens, and Bosch were top gainers, while stocks like ITC, DMart, LTI, Mindtree, and Dabur were among the biggest losers. Similarly, in the mid-cap space, stocks like Oracle, Dixon Technologies, BSE Ltd., and Cochin Shipyard posted strong returns, while Vodafone and Mandhana, which had done well in the past, saw poor performance in 2024.

In the small-cap space, stocks like G E T&D, K&Tech, Motilal Oswal, Amber Enterprises, and Aegis Logistics saw excellent gains, while stocks like Zomato and RBN failed to perform.

In conclusion, Nifty clocked its ninth consecutive positive year, although the return was slower than expected. Despite challenges like foreign selling and domestic growth concerns, the Indian market has shown resilience. The long-term story for India remains positive, and while we don’t know what 2025 holds, the belief in the Indian market continues to be strong.

What were your key takeaways from the markets in 2024? What stocks did well for you this year? Do share your thoughts in the comments section below. Thank you for watching, and don’t forget to like and share these videos with your friends and family. I hope you’ve already subscribed to the channel!

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