Equity: Bubble or Bull Market

The Indian equity market has seen a remarkable surge in performance, particularly within the broader equity indices. Over the past six months, these indices have surged by over 30 per cent, significantly outpacing Nifty 50, which registered an increase of only 11.7 per cent during the same period. Investors are therefore rightly concerned about whether this is just a mere bubble that may soon be pricked. The report takes into consideration historical data to arrive at the truth

In a remarkable display of strength and resilience, the Indian equity market has delivered an outstanding performance over the past six months ending August 2023. With Nifty 50 surging past the coveted 20,000 mark and both the mid-cap and small-cap indices scaling unprecedented heights after a one day hiccup, the Indian stock market has been on a remarkable bull run. What’s even more astonishing is that this surge has not been confined to domestic boundaries alone. The Indian equities have boldly outshone their international counterparts, emerging as a shining star in the world of investments. The MSCI India index is up by 15 per cent in the last six months compared to the MSCI World index which has been up by 11 per cent while the MSCI Emerging Markets index is up by only 2.5 per cent in the same period.

The Indian equity market has seen a remarkable surge in performance, particularly within the broader equity indices. Over the past six months, these indices have surged by over 30 per cent, significantly outpacing Nifty 50, which registered an increase of only 11.7 per cent during the same period. To put these returns in perspective, consider that over the past 18.5 years, Nifty has, on an average, delivered an annualised return of 12.9 per cent. In contrast, the mid-cap and small-cap indices have delivered even more impressive returns, averaging 15.7 per cent and 14.4 per cent, respectively, over the same period.