The Indian market has rallied to be one of the top performing ones in the world in 2017. The reasons were several — easy availability of money globally, India’s improving economic fundamentals, the government’s demonstration of its serious intent for economic reforms, signs of a turnaround in corporate revenues and state poll results supporting the ruling BJP-led alliance.
The sensex closed with a 28% gain at 34,057 points, while the Nifty was up 29% at 10,531 points as investors pushed both the indices to record closing highs in the last session of the year. According to “players” of Indian market, the introduction of GST and the Insolvency & Bankruptcy Code (IBC) were the most significant moves by the government.
And the emergence of the domestic mutual fund industry as a strong counterbalance to foreign funds was an important shift in the country’s financial space.
Aided by the rallying market, Dalal Street investors were richer by Rs 51.2 lakh crore in 2017, with the BSE’s market capitalisation now at an all time high of Rs 157 lakh crore. Market players pointed out that the year could also be termed as that of small- and mid-cap stocks with the BSE’s small-cap index up 60% and the mid-cap index 48%. It was also the year when real estate stocks made a strong comeback, while pharma stocks — considered by many as a defensive bet — lost substantial ground.
Market players pointed out that the coming year may not be as smooth as 2017. Already there are increasing macro concerns like growing fiscal deficit and government’s higher borrowing at a time when its revenue collections are faltering, crude oil prices are rallying and inflation is rising. However, a major positive could be the reversal in corporate earnings trend and expectations of a consumption-led demand boosting economic growth.