Indian Stocks Outpace Global Markets Over 6 Years on Rising Consumption and Earnings
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Indian equity markets have significantly outperformed major global indexes over the past 6 years, with small caps poised to overtake the S&P 500. This is attributed to rising domestic consumption and earnings.
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Price-to-earnings ratios reveal Indian indices have shown greater valuation discipline than US and UK counterparts, which have been more affected by special events.
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Trading volumes indicate more sustained uptrends on Indian exchanges compared to the LSE, with Indian traders exhibiting more rational behavior.
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Despite strong performance, large-scale capital flight from US to India is unlikely due to India’s preference for long-term institutional investors over short-term profit seekers.
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The disaggregation of market player behavior globally presents opportunities for sector rotation and diversification for savvy investors. Caveat emptor.