The record run at the stock market this year has placed India at the top of the pecking order among benchmark indices of major emerging economies.
Data shows that both the Indian indices have risen nearly 10 percent in dollar terms so far in this current calendar year, beating returns from stock markets of China, Japan, Hong Kong, UK, France and Canada.
For instance, UK’s FTSE 100 is up 5.77 percent in CY24, while France's CAC 40 dipped by 1.1 percent even as Germany's DAX gained 7.2 percent.
In Asia, Japan's Nikkei and Topix each saw gains of 6.2 percent, while Hong Kong's Hang Seng moved up 5.8 percent. China's Shanghai Composite has fallen 2.5 percent with South Korea's Kospi also registering a fall of 1 percent. Indonesia's Jakarta Composite and Philippines’ PSEi Index fell by 6 percent and 4.8 percent, respectively.
Meanwhile, world's largest stock market in terms of market capitalisation - USA - has outperformed India in CY24 till date. The S&P 500 index is up slightly over 16% while Nasdaq has gained 21% on the back of robust performance by the tech sector. In contrast, the Dow Jones Industrial Average has recorded a modest gain of four percent.
Brazil's Ibovespa index is facing challenges, declining by 18% amidst economic pressures in the region.
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The strong show by India's stock markets has partly been fuelled by the optimism of reforms push after the return of BJP-led NDA government and a favourable global environment, according to market participants.
Increased participation from foreign portfolio investors (FPIs) and steady buying from domestic investors, coupled with expectations of robust economic growth and policy continuity is contributing to the market upswing, experts said. This tailwind has improved India's risk profile by reversing net outflows from FIIs during the June quarter.
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Expectations from the upcoming budget have further bolstered the rally, as there is optimism that the new government's pro-growth stance will be reinforced with additional measures.
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Motilal Oswal Financial Services' latest note has highlighted the favourable economic condition for India, describing it as its own mini-Goldilocks moment.
The country benefits from strong macroeconomic indicators such as GDP growth projection of 8.2% for FY24, stable inflation around 5%, manageable current account and fiscal deficits, and a stable currency, the MOFSL note said, adding that corporate earnings too are looking robust.
Going ahead, some analysts anticipate a potentially less exuberant stock market compared to the first half, given some concerns around over-valuation.
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