India leads top 10 global markets with strongest monthly rally in four years

Broader indices such as the BSE MidCap and SmallCap saw even stronger performances, climbing 8.4 percent and 9.8 percent, respectively.

After five consecutive months of decline, India's market cap witnessed a robust increase of 9.4 percent in dollar terms so far in March. This marks the highest monthly gain in four years and positions India as the top performer among the world’s ten largest equity markets.

According to exchange data, the total market capitalisation of all listed firms on BSE stands at around $4.8 trillion, rising from around $4.39 trillion at the end of February. This surge represents the strongest growth since May 2021.

Germany followed with a 5.64 percent rise in market capitalisation to over $2.81 trillion, while Japan and Hong Kong posted gains of 4.9 percent and 4 percent, respectively. France recorded a 2.7 percent increase, China 2.2 percent, the United Kingdom 2 percent, and Canada saw a modest gain of 0.44 percent.

In contrast, the United States, the world’s largest equity market with a valuation of $59.13 trillion, declined by 3.7 percent during the same period. Saudi Arabia also posted a drop of 4.4 percent.

Indian equity markets experienced strong momentum in March, with benchmark indices Sensex and Nifty rising by 5 percent each. Broader indices such as the BSE MidCap and SmallCap saw even stronger performances, climbing 8.4 percent and 9.8 percent, respectively.

The rally is primarily on account of value buying and expectations of rate cut by the Reserve Bank of India. Investor sentiment is also buoyed by signals from the US Federal Reserve, which has projected two interest rate cuts in 2025.

Recent lower-than-expected consumer price index inflation, which remained below the RBI’s medium-term target of 4 percent has raised market expectations of a potential rate cut in the central bank’s upcoming April monetary policy review.

Analysts also anticipate fresh liquidity measures from the RBI, building on recent initiatives to ease liquidity constraints in the banking system. Since late 2024, the RBI has injected around Rs3 lakh crore in durable liquidity through a combination of variable rate repo (VRR) auctions, swaps, and open market operations (OMOs).

Gaurang Shah, Senior Vice President at Geojit Financial Services, noted that markets have rebounded by over 1,100 points on Nifty and 3,500 points on Sensex since the start of March. As the financial year-end approaches, investors are closely watching Trump’s next move on reciprocal tariffs. A minor correction is possible following this rally.

For short-term traders, it may be advisable to book profits, while long-term investors should stay invested, as further upside is possible if fourth-quarter earnings remain supportive. While the market outlook remains dynamic, prudent investment decisions should be based on fundamental analysis rather than brokerage recommendations, Shah added.

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