2024 in review: From General Elections to Yen carry trade unwind — 5 key events that impacted stock market investors | Stock Market News
Source: Live Mint
The year 2024 was an eventful period for the Indian stock market. Investors saw Dalal Street smashing record after record in the first half, only to face turbulent waters and a series of challenges in the latter half.
The Nifty began the year at 21,700 and clinched its all-time high of 26,277 in September, posting impressive gains of around 21%. However, the index faced sharp corrections in the final few months of the year, erasing over half of these gains. As a result, the yearly return now stands at a modest 9%.
As we welcome the year 2025, here are five significant events that hugely impacted the stock market investors’ sentiment in 2024.
1. Lok Sabha Elections 2024
The General Elections 2024 marked Narendra Modi’s return as prime minister for the third time but with a coalition government. Despite several exit polls indicating a clear victory, the BJP witnessed a massive reduction in its vote share this year. The unprecedented election results sparked a huge selloff in the Indian stock market.
“One of the most notable market moves occurred during the general election month. Exit polls triggered a sharp knee-jerk rally of approximately 4% in a single day. However, the actual election results, which fell short of market expectations, prompted a significant sell-off, driving the Nifty down 8% from 23,300 to 21,300 in just one session on 4th June,” said Rajesh Bhosale, Technical Analyst at Angel One.
2. Yen carry trade unwinding
The Bank of Japan made a significant policy shift by adjusting its stance on interest rates on August 5, 2024. The BOJ raised the interest rates by 25 basis points, i.e. 0.25%. The move, which addressed the growing concerns about the yen’s weakness, sent shockwaves across the global markets.
Explaining the possible impact of the BOJ rate hike, which strengthened the yen against other currencies,Satish Chandra Aluri, Lemonn Markets Desk, said, “The overall sentiment among investors turned negative as uncertainty regarding US economic conditions and Japanese monetary policy persisted, leading to heightened volatility and sharp losses.”
On August 6, the BSE’s Sensex and Nifty 50 declined over 3% during intraday trades, the sharpest single-day fall since June 4, the day of the election outcome.
3. Weak earnings outcome
India Inc started 2024 on a healthy note as the first half of the year witnessed robust earnings growth. However, corporate India reported poor performance in the July-September quarter.
According to an analysis by JM Financial in November, approximately 44% of firms underperformed and missed analyst estimates, whereas 41% of them exceeded forecasts. Amid dull market earnings, the NSE Nifty 50 and BSE Sensex lost about 6% in October, marking theirworst monthly performance since March 2020.
“The slowdown in corporate earnings – Q2 earnings of FY 2024 – sent shockwaves through the investing communities with substantially subpar earning growth for corporate India. Indications of a cyclical slowdown added to the woes of investors,” noted Harsh Gahlaut, Co-founder and CEO of FinEdge.
4. Middle-East crisis
The ongoing Middle East crisis escalated to the next level after Iran launched 184 ballistic missiles at Israel on October 1. The attack drew sharp criticism from the West and a stern warning of retaliation by Israel Prime Minister Benjamin Netanyahu. Weeks later, Israel carried out a series of overnight air strikes on Iran on October 26. The intensified tensions raised concerns of a possible full-scale regional crisis and significantly impacted Indian stock market investors’ sentiment.
5. US Elections outcome
Republican leader Donald Trump registered a landslide victory in the US Presidential Elections 2024 in November this year. The result cheered the cryptocurrency market as Bitcoin soared to an all-time high just days after Trump’s historic win.
The world’s largest cryptocurrency reachedan impressive new record high of $107,791 on December 16. Apart from the crypto industry, the US Presidential Elections remained one of the key factors impacting the Indian bourses in November.
“Our markets were on a downward trend even before the US Election Results for various reasons ranging from disappointing earnings, high valuations and foreign outflows. Post the US elections, barring the immediate short-lived bounce, benchmark Nifty 50 went on to lose another ~5% as foreign outflows accelerated on account of a stronger US dollar as global investors shifted flows back to the US after Trump won the election on the hopes of more business-friendly policies (less regulation and taxes),” said Satish Chandra Aluri.
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