Nifty and Sensex Outperforming Global Markets in 2024

  • September 24, 2024
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Nifty and Sensex Outperforming Global Markets in 2024

Sub: Eco

Sec: Capital Market

  • Performance Overview:
    • India’s NSE Nifty 50 and S&P BSE Sensex have emerged as top-performing indices in 2024, ranking third and fourth among major global bourses.
    • Nifty gained 18.7%, while Sensex rose 17% during the year, trailing only behind Wall Street’s Nasdaq (22%) and S&P 500 (20.5%).
  • Global Comparisons:
    • Japan’s Nikkei 225 and Germany’s DAX followed India’s indices, rising by 13% and 12%, respectively.
    • India’s weightage in the MSCI Index surpassed China for the first time this year, signifying India’s growing influence in the global market.
  • Factors Driving the Rally:
    • The market rally is attributed to expectations of policy continuity following India’s national elections in June, along with a strong growth outlook.
    • The rally gained further strength after the U.S. Federal Reserve’s rate cut on September 18, which is expected to boost foreign portfolio inflows.
  • Foreign Portfolio Inflows:
    • After a moderation in August, foreign portfolio inflows are on track to hit a six-month high in September, driven by the Fed’s rate cut and India’s strong economic outlook.
  • Valuations and Market Conditions:
    • The 12-month forward price-to-earnings (P/E) ratios for Sensex and Nifty are at 23.6 and 24.4, respectively, the highest among emerging markets.
    • Technical indicators suggest that both indices are now in overbought territory, indicating potential caution for investors.

The strong performance of Nifty and Sensex highlights India’s growing prominence in global markets, supported by foreign investments and a robust economic outlook for 2024.

Price-to-Earnings (P/E) Ratio: The P/E ratio compares a company’s stock price to its earnings per share (EPS), helping investors assess if a stock is overvalued or undervalued. A higher P/E suggests expectations of future growth.

NSE Nifty 50: This is India’s benchmark index, representing the weighted average of 50 large-cap Indian companies listed on the National Stock Exchange (NSE).

S&P BSE Sensex: A key stock market index in India, representing the top 30 companies listed on the Bombay Stock Exchange (BSE).

Important Indexes of Different Countries:

  • US: S&P 500, Dow Jones Industrial Average (DJIA), Nasdaq Composite.
  • UK: FTSE 100.
  • Japan: Nikkei 225.
  • Germany: DAX
  • China: Shanghai Composite Index
  • France: CAC 40.
economy Nifty and Sensex Outperforming Global Markets in 2024