The year 2023 proved historic and memorable for the Indian stock market as it demonstrated both resilience and vulnerability. In the first half, the equity market witnessed sharp volatility amid inflation and interest rate jitters, while geo-political tensions and Adani-Hindenburg saga further added to woes of the market. Following a corrective phase in the first half, Dalal Street staged a smart recovery in the second half, showcasing its inherent resilience amid positive macro indicators, dovish policy stance by the RBI, improvement in foreign fund inflows, as well as ease in geopolitical risks and inflation.

The S&P BSE Sensex started the year on a subdued note at around 61,000 levels, surrounded by adverse conditions such as hyperinflation, overvaluation, and fragile global economic environment. The sentiment was further dented by a Hindenburg Research report released in the last week of January in which the U.S.-based short-seller accused the billionaire Gautam Adani-led Adani group of stock manipulation and unsustainable debt.

The BSE Sensex touched its lowest level of 57,085 marks on March 20 in the aftermath of the Adani-Hindenburg row, while the banking crisis in the United States further triggered a sharp correction in global markets.

Towards the end of the year, the stock market recorded strong bull run, particularly this month to hit a fresh all-time peak of 71,595 on December 15, aided by encouraging global cues, strong corporate earnings, as well as expectations of healthy macro-economic data points. The 30-share Sensex surged more than 4,000 points in first two week of December as the market witnessed broader-based rally, fuelled by strong win of Prime Minister Narendra Modi-led BJP in three crucial assembly elections ahead of Lok Sabha election due next year. The better-than-expected Q2 GDP numbers, surge in fund inflows by foreign investors amid continued status quo by the RBI as well as dovish narrative by the U.S. Federal Reserve, further lifted sentiment.

Key milestones from 2023

  • In CY23, the BSE Sensex surpassed the 71,000 market for the first time, and the NSE Nifty crossed the 21,000 level, with both indexes gaining around 17%.

  • The Sensex hit multiple life-time highs and scaled a fresh all-time peak of 71,595 on December 15. Similarly, the Nifty touched a new all-time high of 21,492.

  • The BSE Midcap Index and Smallcap Index also touched their respective record highs, outperforming the benchmark indices by rising over 40% each.

  • On the sectoral front, Realty (70%), Capital Goods (55%), PSU (48%), and Auto (39%), were among top performers.

  • The S&P BSE Sensex rallied more than 10,000 points on year-to-date (YTD). From March lows of 57,085, the Sensex surged over 14,500 points in 9 months.

Market from experts’ eye

Vinod Nair, Head of Research at Geojit Financial Services, said that the domestic market demonstrated strong resilience this year, despite hiccups in the first few months. "At the beginning of the year, uncertainties surrounded the economy and market due to challenges such as supply constraints, hyperinflation, and overvaluation. The collapse of US small banks, driven by rising interest rates, added to the concerns… But India’s GDP growth forecast started to upgrade from Q1, and the earnings growth of corporate continued its robustness.”

Neeraj Chadawar, Head - Fundamental and Quantitative Research, Axis Securities, said that the year 2023 proved intriguing for the Indian equity market, characterised by notable volatility in the first half. However, in the second half, the Indian market remarkably recovered from its Mar’23 bottom. “This rally further strengthened during December 2023 after these three back-to-back events favoured the equity market - the results of the assembly elections in three out of four key states raised the expectations of policy continuity in 2024; the status quo maintained by the RBI; and dovish narrative from the U.S. FED in the policy meeting.”

According to Sunil Nyati, Managing Director, Swastika Investmart, midcap and smallcap stocks dominated the market during most of the year, fuelled by robust macroeconomic fundamentals and ample domestic liquidity. However, the final two months witnessed a dramatic shift, with largecap indices stealing the limelight. “This surge can be attributed to a confluence of factors: the impending elections fostering political stability, promising whispers of rate cuts in 2024, and a much-needed decline in energy prices, finally enticing foreign investors back into the fold. This influx of foreign capital propelled large-cap indices to new record highs.”

What lies ahead for the market?

Geojit’s Vinod Nair expects Nifty50 to provide a return of around 10-12% in the calendar year 2024 (CY24). “Currently, we are positive on H1CY24 in anticipation of a pre-election rally as the domestic political and global market environment is aptly placed. And the final performance of the second half hinges on the election outcome and the final budget, which is also forecast to be stable.”

In the words of Neeraj Chadawar of Axis Securities, the Indian economy stands at a sweet spot of growth and remains the land of stability against the backdrop of a volatile global economy. “We foresee 14% CAGR growth in Nifty earnings over FY23-26. In our base case, we foresee the December 2024 Nifty Target at 23,000. We assume the continuation of the political stability and consequent visibility on the policy continuity after the 2024 general elections,” he says.

In sharp contrast, Kotak Securities expects the Nifty to reach 21,834 levels by the close of the calendar year 2024, just 2% above the current level of 21,420. The agency believes that Indian markets may see consolidation due to rich valuations. For the bull case, the brokerage assigned a target of 24,260, while it pegged Nifty at 19,408 in the bear case.

On Technical chart, the Sensex has been following a higher top, higher bottom formation on the monthly timeframe, indicating an ascending pattern on a larger scale, says Rupak De, Senior Technical Analyst at LKP Securities.

“Looking ahead, it's anticipated that the Sensex and the overall market will maintain a positive trajectory. On the upper end, the Sensex could potentially extend gains towards 74,000 and higher in 2024. On the downside, support is expected at 68,000. The prevailing sentiment is likely to stay robust as long as it remains above the 68,000 mark," says De.

Meanwhile, Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy, says that market fundamentals remain strong despite potential investor anxiety surrounding India's general elections and geopolitical dynamics. “Fueled by improved ease of doing business, controlled inflation, and stable foreign cash inflows, increasing corporate earnings, 2024 is poised to be a bullish market.  Mid-teen returns are expected in Indian equity markets, with the Nifty reaching 23,500 and the Sensex hitting 78,000 by end of 2024,” Gupta says.

(DISCLAIMER: The views and opinions expressed by investment experts on are either their own or of their organisations, but not necessarily that of and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)

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