Sensex returns in odd years outshine even. What is the stock market outlook for 2025?
- Sensex's average gains in odd years stand at a robust 26.56%, more than double the modest 11.20% average gains in even years. Similarly, the median Sensex return in odd years is 18.74%, significantly higher than the 8.17% recorded for even years.
The Indian stock market benchmark indices, Sensex and Nifty 50, have given modest returns of over 8% in the year 2024. An intriguing analysis of Sensex performance between 1979 and 2024 reveals a compelling trend — odd years consistently outpace even years in terms of market returns.
According to the data, the average gains of Sensex in odd years stand at a robust 26.56%, more than double the modest 11.20% average gains in even years. Similarly, the median Sensex return in odd years is 18.74%, significantly higher than the 8.17% recorded for even years.
“This data offers valuable insights, especially for those who consider numerology or the influence of numbers in market trends. Odd years’ historical outperformance, coupled with the ongoing 9-year winning streak, raises a critical question: Will 2025 continue this trend and mark a record-breaking 10th consecutive year of gains?,” said Raj Gaikar, Research Analyst at SAMCO Securities.
Additionally, data shows while the maximum return in odd years touched an impressive 93.98%, even years lagged with a maximum of 50.68%. On the downside, the maximum fall for Sensex stood at 24.64% in the odd year compared with 52.45% in the even year.
Out of 23 odd years, Sensex delivered positive returns in 17 years with a winning ratio of 73.91%. Meanwhile, Sensex ended on a positive note in 18 out of 23 even years, with a 78.26% winning ratio.
The Sensex is also on a winning streak of yearly returns since 2016, with consecutive positive results every year, including 8.17% gain in 2024. As the market enters 2025, investors eagerly await whether this streak will continue, adding another positive year to the record.
Sensex Outlook for 2025
Analysts expect the long-term growth story of the Indian equity market will continue. However, with current valuations offering limited scope for further expansion, an increase in corporate earnings will be the primary driver of the market returns moving forward.
Hence, bottom-up stock picking with a focus on ‘Growth at a Reasonable Price’ and ‘Quality’ would be keys to generating satisfactory returns in the next one year, they said.
On the technical front, Sensex index is encountering resistance at the upper band of a rising channel established in June 2022, triggering further profit-booking.
However, it is nearing a key support zone at 76,800 – 76,500, which coincides with the November 2024 low and the lower band of the rising channel. The 76,500 level is a critical support for the index. Sustaining above this could fuel a rally toward the all-time high of 85,978, potentially extending gains to 91,800 in the coming year, according to Axis Securities.
The brokerage firm expects a breach below 76,500 may trigger a drop to 70,200, the June 2024 swing low. It advises investors to remain cautious and focus on stock-specific opportunities.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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