India’s m-cap sees sharpest drop in five months, ranks fifth-worst globally in July  

The US, the world’s largest equity market, gained 3.4 percent, while Canada rose 3.2 percent.

India's BSE all listed firms' market capitalisation posted the sharpest decline among the world’s top ten equity markets in July, registering its steepest drop in five months after four consecutive months of gains.

According to Bloomberg, BSE all listed companies' total market cap fell 3.6 percent, the largest monthly decline since February this year, to $5.2 trillion from $5.38 trillion.

Analysts attributed the decline in Indian markets due to lacklustre quarterly earnings, negative foreign portfolio investment (FPI) flows, a significant diversion of capital towards IPOs and QIPs, and overall cautious sentiment around relatively expensive Indian equities.

In contrast, global markets saw broad gains. China, the world’s second-largest market by capitalisation, led with a 6.7 percent rise in July, followed by Hong Kong (up 6 percent) .

The US, the world’s largest equity market, gained 3.5 percent, while Canada rose 2.4 percent. Market capitalisation in the Taiwan rose 2.2 percent while United Kingdom and France increased by 0.2 percent each. Among the laggards, Germany fell 1.5 percent,  Saudi Arabia declined 1.3 percent, Japan slipped 1.4 percent, and Switzerland dipped 1 percent.

Globally, the Indian market was the fifth-worst performer in July after Brazil, which saw an 8.4 percent drop, followed by Botswana (down 5.6 percent), Lebanon (down 4.2 percent), and Chile (down 4.1 percent).

Indian markets fell in July with Sensex and Nifty dropped over 2.6 percent each while broader markets lost 1.7 percent each. This fall was due to booking profit in IT and banking stocks.

Technically, the index had entered the month in an overbought zone, leading to a natural pullback. It later found support near its 100-day EMA around 24,800. Market sentiment was also weighed down by heavy FII selling, with net outflows of Rs36,591 crore till July 28. Rising India VIX, short buildup in index futures, and a falling Put-Call Ratio signaled caution in the derivatives space. These factors indicated growing nervousness among traders, experts said.

Mandar Bhojane, Senior Equity Research Analyst, Choice Broking said on the macro front, delays in the budget, post-election uncertainty, and rotation to defensive sectors added pressure. While global markets rallied on cooling inflation and strong earnings, Indian investors turned cautious. Still, the broader trend remains bullish, and dips are being viewed as buying opportunities, he added.

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