NIFTY Realty index rises 38% in 2024; here are the best-performing sectors and their key growth triggers

Year 2024 has been a roller coaster ride for the equity market, with benchmark index NIFTY50 hitting life highs of 26,277 points this year. However, it is currently trading around 24,200 levels with an 11.36% return on a year-to-date basis.

The market performance across 14 major sectors has been diversified with NIFTY’s sectoral indices such as Realty (37.29%), Consumer Durable (36.98%), Healthcare (34.4%), and Pharma (31.90%) significantly outperforming the markets and delivering the best performance.

Apart from the above, NIFTY's IT (28%), Auto (25.95%), PSU Bank (22.20%), Metals (18.80%), Oil & Gas (16.20%) and Financial Services (14.13%) have outperformed the market.

Both NIFTY Bank (9.26%) and Private Bank (3.60%) indices underperformed the broader market this year. While sectors like FMCG (-2%) and Media (-19.20%) had poor performance in 2024.

Let’s learn about NIFTY’s top 3 sectoral indices - Realty, Consumer Durable, and Healthcare- and what drove them.

In 2024 on a YTD basis, NIFTY Realty (37.29%), Consumer Durables (36.98%), and Healthcare (34.4%) stood as the top-performing sectors of the year.

NIFTY Realty

The Nifty Realty Index is designed to measure the performance of 10 real estate companies. These stocks are primarily engaged in the construction of residential and commercial properties and recorded the best performance across the 14 major sectoral indices of NSE.

The record high pre-sales numbers by realtors and strong demand led to an increase in investors' buying interest in the sector. Along with these regulatory reforms, SEBI’s approval for Real Estate Investment Trust (REIT) to allow all types of investors to invest in the Indian real estate market and real estate market consolidation among large players provided essential stability to the sector.

Government initiatives to promote investment in sectors, such as an increase in foreign direct investment (FDI) limits, enhance transparency in deal structures added to attract global investment in the Indian real estate market.

NIFTY Consumer Durable

The Nifty Consumer Durables Index which is designed to measure the performance of 15 stocks belonging to the Consumer Durables industry reported the second best performance across the sectors of NSE.

The sector witnessed significant growth due to favourable government policies like the Production-Linked Incentive (PLI) Scheme and the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). Other factors such as India's cost competitiveness, robust infrastructure, and skilled labour, along with China +1 narrative force helped to showcase India’s manufacturing capabilities globally.

NIFTY Healthcare

The Nifty Healthcare Index is designed to measure the performance of the 20 Healthcare companies listed on the NSE and stands third among the sectors for their performance in 2024.

Rising demand in healthcare due to demographic changes, lifestyle diseases, and advancements in medical technology, sustained the growth in the sector. Amid slowdowns in manufacturing and financial services due to economic headwinds, investors preferred defensive sectors like healthcare which is less volatile to macro-economic factors.

Further growing awareness about diseases and government initiatives like Ayushman Bharat, a scheme aimed to provide universal healthcare also contributed to demand for healthcare services.

Conclusion

NIFTY Realty, Consumer Durables, and Healthcare indices have shown strong growth driven by sector-specific triggers. The realty index benefited from record pre-sales and favourable reforms. Consumer durables were driven by favourable government policies and the geopolitical atmosphere. At the same time, defensive healthcare benefited amid the economic downturn due to rising demand and government initiatives. Stock-specific Raymond, Dixon and Glenmark remained the sectoral leaders with their performance.