Over the last 10 years, the Nifty index has gone up nine times. The energy and financial services sectors have performed just as well, making them strong contenders. They achieved impressive yearly returns of 16% and 13%, while the Nifty’s average was 11%. Interestingly, all three were down in 2015, but they’ve been on a winning streak since then.
The financial services sector, which carries the heaviest weight in the Nifty at about 34%, has seen returns between 11% and 41% on five occasions during the years 2017-2019, 2021, and 2023. However, there were also years with lower returns between 5% and 9% in 2016, 2020, 2022, and 2024. Notably, the index dropped over 5% in 2015.
The energy sector is the third-largest part of the Nifty, making up about 10%. It did better than the Nifty in 2015, dropping less than 1% compared to Nifty’s 4% fall. The Nifty Energy index had double-digit returns six times, peaking at about 39% in 2017.
The Nifty did best when both financial services and energy sectors performed well together. In 2017, for example, the Nifty gained 29%, while financial services soared by 41%, and energy grew by 39%. The Nifty also had solid returns of 24% in 2021 and 20% in 2023, with the financial services index growing by 14% and 13% in those years.
The real estate sector has been a big winner over the past decade, averaging 25% returns, although it faced some ups and downs. It had four down years, with the worst being a 33% drop in 2018 and a 15% drop in 2015. In contrast, it saw strong returns of 81% in 2023 and 34% in 2024.
Other sectors like Nifty Bank, Nifty FMCG, and Nifty Commodities have also performed well, finishing positive eight times in the last 10 years, with average annual returns of 11%, 11%, and 13%, respectively. Nifty Auto, IT, and Metal sectors managed positive returns seven times.
On the other hand, Nifty PSU Bank, Nifty Pharma, and Nifty Media have struggled. They posted lower average returns of 9%, 10%, and 0.17% and have finished positive only six, five, and four times between 2015 and 2024.
Looking ahead to 2025, Bajaj Brokerage believes banks and media could improve, while FMCG also looks promising. They predict the IT sector will do better than the Nifty. They suggest making some profits in auto, infrastructure, metals, and energy.
Shrikant Chouhan from Kotak Securities expects a 4.9% increase in Nifty-50 profits in FY25, climbing to 16.3% in FY26, following a robust 20.3% growth in FY24. He advises investing in sectors like banking, IT, real estate, pharma, and healthcare, and suggests buying stocks when prices dip.
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