ET Intelligence group : Indian equities have weathered the volatile market conditions in 2022 helped by a sustained fund flow from domestic investors at a time when majority of global indices have failed to earn returns. The MSCI India index, widely used by global fund managers to evaluate the performance of Indian equities, has outperformed the MSCI World index by 20% in 2022, the highest in eight years. According to the data from Bloomberg, the performance of Indian equities was better for the third year in a row. This has also taken India’s share in the global market capitalization to a record 3.7%compared with the long-term average of 2.5%.
India’s outperformance over the developing peers is even more accentuated. Indian equities outperformed the emerging market (EM) counterparts by 23% in 2022; the second year in a row when it was above 20%. With this, India’s dynamic weight in the MSCI EM index touched a record 15% in 2022.
Over the past decade, the MSCI India index has delivered an annual return of 10.4% while the global equity indices rose by 6.8%. Indian stocks trade at a 38% premium to the global equities compared with a long term average premium of 13%.
Domestic investors have played a ley role in the stellar shoe by Indian equities. According to the SEBI data, the domestic mutual funds invested close to Rs 2 lakh crore in equities in 2022 while foreign portfolio investors (FPIs) sold equities worth Rs 1.2 lakh crore. The SIP book reached a record high Rs 13,306 crore in November 2022. In addition, given the higher earnings growth of banks, the one-year forward Nifty 50 earnings per share (EPS) rose by 13% year-on-year to Rs 955 per share, which supported the momentum in the domestic equities.
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