India the best equity market in March

COIMBATORE: The recent strong rally in equities has resulted in India becoming the best performer among major global

stock markets

. Indian markets, which gained 8% in

local currency

terms, emerged as the best performer in March. With this surge, the market capitalisation-GDP (gross domestic product) ratio touched 83%, which is above the historical average of 78%.


India’s share in the world market cap, at 2.8%, was also above its historical average of 2.5%. In March, India, China, UK, Taiwan and the US were the key global markets to close higher in local currency terms. South Korea and Japan posted declines during the month.

After rallying 6.7% in the first 11 months of 2018-19 (up to February),the Nifty extends its gains in March rising by 7.7% — the highest monthly gain in three years. The Nifty ended FY19 (2018-19) with a nearly 15% increase.

Valuations of Indian equities are, however, marginally above their long-period averages. The broad-based Nifty is trading at a 12-month forward P/E (price-earnings) of 18.5 times, a 5% premium to its long-period average of 17.6 times. Nifty’s P/B (price-book) ratio of 2.8 times is also above its historical average.

The Nifty is trading at a 12-month-forward RoE (return on equity) of 15%, marginally above its long-term average. On an overall basis, Indian equities are trading at 23.4 times estimated earnings for FY19. All key markets continue trading at a discount to India.