India was among the top-performing markets in May 2023, said brokerage house Motilal Oswal in a report. Indian equities have been trading at 23x FY23 earnings and all key markets continue to trade at a discount to India, it added.
Among the key global markets, Japan (+7 percent), Taiwan (+6 percent), Brazil (+4 percent), Korea (+3 percent), India (+3 percent), and Russia (+2 percent) ended higher in May’23, while the UK (-5 percent), Indonesia (-4 percent), China (-4 percent), and MSCI EM (-2 percent) ended lower in local currency terms, informed the report. The US market was flat.
The brokerage also highlighted that India is among the top 10 contributors to the global market cap. One must note that the top 10 contributors accounted for 80 percent of the global market cap in May’23. India’s share in the global market cap was at 3.2 percent in May’23, above its historical average of 2.6 percent, said MOSL.
Meanwhile, in the last one year as well, India remained one of the best investment bets for wealth accumulators.
According to MOSL, over the last 12 months, the MSCI India index (+7 percent) has outperformed the MSCI EM index (-11 percent). Over the last 10 years, it has outperformed the MSCI EM index by 173 percent, it revealed.
At the time when the global market cap declined 2.9 percent ($3 trillion) over the last 12 months, India’s market cap rose 2.7 percent. Overall, barring India and Japan, all key global markets witnessed a decline in market cap over the last 12 months, it added.
What lies ahead?
Going ahead, even though Nifty is seen kissing its peak, experts see some volatility in the near future, however, the medium and long-term growth opportunities remain intact for the Indian markets.
“The Nifty index is currently experiencing a sideways trend, indicating a lack of clear direction in its price movement. This sideways movement is accompanied by low trading volumes, suggesting a relatively lower level of market participation and activity. The index has a support level at 18,550, indicating a price level where buyers have shown interest and may provide a foundation for potential price rebounds. On the other hand, there is a resistance level at 18,660, acting as a barrier for upward movements and where sellers may become more active. Despite the sideways trend, the overall undertone of the market remains bullish. This suggests that the prevailing sentiment favors buying opportunities on dips or temporary price declines. Investors are advised to adopt a "buy on dips" approach, indicating a strategy of purchasing the Nifty index when it experiences short-term pullbacks,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.