Statsguru: Six charts show Indian equity markets are nearing another high

The Indian equity markets are close to the all-time highs seen in October 2021, before the Ukraine crisis and central bank rate hikes roiled sentiment.

The S&P BSE Sensex closed at 60,950.36 on Friday. This is 815 points away from the October 18 all-time closing high of 61,765.60. The market had touched 62,245.43 during trade the next day but closed lower.  A comparison with global markets shows that India has outperformed most since then amid all the global volatility (chart 1).

Some sectors have moved higher since then. The capital goods index is 22.5 per cent higher than it was when the market hit the all-time high. The auto index is up 15 per cent since then. Others like information technology have lagged (chart 2).

The recent buoyancy comes amid a let-up in foreign investor selling. They had sold nearly Rs 2.1 trillion worth of Indian stocks in the 12 months since October 2021. Domestic institutions had picked up the slack with buying worth more than Rs 3 trillion (chart 3).

Subdued sentiment has affected fund-raising. Fewer companies came out with initial public offers (chart 4).

The relative resilience of Indian markets may not have translated into similar returns for foreign investors. The depreciation of the rupee has meant that the S&P BSE Sensex is still around 10 per cent below its all-time high in dollar terms (chart 5).

The benchmark index aside, many stocks are still to regain their October 2021 peak. Around 21.9 per cent of S&P BSE 500 companies for which data is available show returns of 20 per cent or more. Another 7.4 per cent show returns between 10 per cent to 20 per cent. A tenth of the companies show single-digit gains. The bulk of companies (60.5 per cent) are still in negative territory (chart 6).