The Good Times Will Continue, But Not At This Dizzying Pace

The calendar year 2023 was a great year for Indian markets and they fared very well. In the year, BSE SENSEX gained 11,399.52 points or 18.74 per cent to close at 72,240.26 points. Similarly, NIFTY gained 3,626.10 points or 20.03 per cent to close at 21,731.40 points.

In the same period, Dow gained 4,484.59 points or 13.53 per cent to close at 37,631.87 points.

What is distinctive or stands out is the fact that the rally was a bit skewed to the last 45 days of the calendar year whether it is India or the US. Of course, the reasons were different and there is no similarity between the two whatsoever.

Let us look at the growth during the year.

Markets made their bottom for the year in March. The level on the BSE SENSEX at that time was about 57,000 points. From there they rose to make a new lifetime high in July at a level of 67,619 points. A couple of months later, this was again violated and a new level of 67,927 points was achieved in September.

The next set of movements began in December and the rise was steep and the inclination was difficult to comprehend. SENSEX has risen virtually non-stop and closed the year at a level of 72,240.26 points while NIFTY closed at a level of 21,731.40 points.


The rise in SENSEX in the first ten months of 2023 was 3,034.19 points or 4.99 per cent while in NIFTY it was 974.30 points or 5.38 per cent. In November, the rally in SENSEX was 3,113.51 points or 4.87 per cent while it was 1,053.55 points or 5.52 per cent in NIFTY.

The rally in December was steep, with SENSEX gaining 5,251.82 points or 7.84 per cent and NIFTY gaining 1,598.25 points or 7.94 per cent.

In retrospect, the rally in the last two months of 2023 -- November and December -- was 8,365.33 points or 13.10 per cent in BSE SENSEX and 2,651.80 points or 13.90 per cent in NIFTY.


To sum up, the rally in BSE SENSEX was 18.74 per cent of which 26.62 per cent was in the first 10 months and the balance 73.38 per cent in the remaining two months.

For NIFTY, the rally in the first 10 months was 26.85 per cent while it was 73.15 per cent in the remaining two months.

There were two big drivers for the skewed rally in the last two months or the last six weeks. The primary and foremost reason is the fact that the results of five state election results were declared on December 3.


The stock market believes very strongly that with these election results, the government at the Centre is in a strong position and is likely to form the government post the general elections in April-May 2024.

Second, the switch in the action of the FPIs who are dominant players in the markets has behaved. Prior to October, they were net short in the markets in the futures segment and were sellers in the cash markets as well.

Over the last two months, they have turned net buyers in the futures and cash segments. They have gone from negative bias to positive bias and hence the pressure on buying in the markets has increased. This has fuelled the rally where domestic institutions have been net buyers being forced to make fresh purchases on the basis of continued SIP money.


The rally in 2023 has been a great one without a doubt. What will happen going forward is a million-dollar question. I believe we have steam left and will continue to do well over the next four to four and a half months till the elections are over.

The important point to note would be that the speed of the rally or the momentum has to slow down and slow down considerably. The kind of returns witnessed particularly in the last six weeks to two months is certainly not sustainable.

In conclusion, good times to continue but on a certainly lower scale hereon.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. Views are personal) - IANS