Market Review – October 2024
World happenings:
October was a tough month for global markets and politics, affecting investor confidence worldwide. In India, the stock market saw significant declines, with Sensex and Nifty dropping after a strong run earlier in the year. This pullback was influenced by global concerns like rising inflation, potential interest rate hikes, and unpredictable policies. Events such as the Middle East tensions and the upcoming U.S. presidential elections added to market caution. By month’s end, Sensex had fallen by 5.77% and Nifty by 6.22%.
Market Round-up:
Indian stocks faced a downturn in October, with the Sensex declining from 84,299 points at the start of the month to 79,700 by the end. After months of steady growth, October’s performance was weighed down by policy and economic concerns. Despite this, investors maintained strong interest in mutual funds, signaling confidence in long-term financial strategies.
Mutual fund inflows were strong, with open-ended equity funds attracting ₹41,887 crore in October—up 21.69% from September. All equity fund categories saw gains, with sectoral and thematic funds leading at ₹12,278 crore, showing that investors are keen on focused investment opportunities. Flexi-cap funds, which offer broader exposure, also saw a surge, attracting ₹5,180 crore compared to ₹3,214 crore in September. Even categories like focused and ELSS funds, which had previously seen six months of outflows, turned positive, indicating a renewed interest in targeted investments.
The Systematic Investment Plan (SIP) segment reached a major milestone in October, with contributions hitting a record of ₹25,323 crore—an increase from ₹24,509 crore in September and ₹16,928 crore a year ago. This reflects growing trust in SIPs as a stable, disciplined approach to investing, especially in uncertain markets.
Debt funds had mixed results in October. While most categories saw inflows, medium- duration and credit-risk funds struggled. Liquid funds were the top choice, with ₹83,863 crore in inflows, as investors sought safer, short-term options amid market volatility. Overnight funds followed with ₹25,783 crore in inflows, and other debt categories showed moderate growth, reflecting a cautious approach in response to interest rate concerns.
Gold Prices Rise with Festive Demand:
Gold prices surged in October, driven by high demand during the Dhanteras and Diwali festivals. By October 30, 24-carat gold was trading at ₹80,450 per 10 grams, while 22-carat gold was at ₹73,750, each up slightly from the previous day. The cultural importance of gold in India, especially during festive times, kept demand strong, reinforcing its role as a trusted asset amid broader economic uncertainties.
Conclusion:
October’s market showed the resilience of Indian investors, who continued to focus on systematic and diversified investments despite a challenging landscape. The record- breaking SIP contributions and broad-based equity inflows underscore a commitment to long-term growth. Debt funds attracted conservative investments, particularly in liquid and overnight funds, in response to interest rate and policy uncertainties.
Gold’s popularity during the festive season highlights its importance not only as a symbol of prosperity but also as a safe asset in uncertain times. Going forward, Indian investors are expected to remain steady, balancing short-term caution with long-term growth ambitions. Mutual funds and gold continue to play essential roles in investment portfolios, with SIPs offering stability amid market fluctuations.
If you like this post, don't forget to subscribe to FIKAA Newsletter, follow our FIKAA page and download our app.