India has emerged as the best performing equity market in the world three months after the sharpest sell-off in history. The benchmark Nifty 50 has gained 35.2% in the past three months, the best among the top global indices, according to the data from Bloomberg. India’s total market capitalization rose by $ 530 billion to $ 1.8 trillion in the past three months. The indices in other major markets including the US, Japan, Germany and France rose by 28%, 25%, 29% and 18% during the period.

With the sharp rebound, the MSCI India index has outperformed the MSCI EM index — a gauge for the equities of developing nations in dollar terms — by 5% in the past three months. India’s market cap is still lower by 15% compared with the pre-lockdown level of $ 2.12-2.20 trillion.

The foreign portfolio investors have invested Rs 44,402 crore in Indian stocks in the past three months after offloading a record Rs 61,972 crore worth of equities in March. In June alone, they purchased equities worth Rs 22,194 crore according to the NSDL data.

On the flip side, the combination of the ‘V’ shape recovery in equities and earnings downgrades has made Indian equities the most expensive at a trailing P/E multiple of 22.6 among the top global markets barring South Korea. The one-year forward P/E is 19, which is at a 25% premium to the 15-year average and higher than 18.2 in February.




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