November was a strong month for equity markets globally. After having hit a worrying high of 5%, the US 10-year yield came off sharply, leading to a risk on. US equity markets represented by Dow and S&P500 surged 7%-9% while equity markets in Brazil, South Korea, and Germany also recorded double digit gains. In line with the global markets, Indian equities too had a strong month, with NIFTY50 gaining 5.5%. Mid and small caps saw stronger gains with S&P BSE Midcap and S&P BSE 250 SmallCap being up by over 9% each. It was a broad-based rally with all sectoral indices ending in green. Reality, oil & gas, and healthcare gained 18%, 13% and 11% respectively. After two months of selling, Foreign Portfolio Investors (FPIs) turned positive with net inflows of USD 1.1 billion in Indian equities. Domestic Institutional Investors (DIIs) saw continued net inflows of USD 1.7 billion. Aiding India’s performance were strong economic numbers along with global rating company S&P upgrading India’s GDP forecast.
Market Outlook
Indian economy has been very resilient last couple of years despite the growing challenges faced by the world. The 7.6% print for GDP growth reported for the last quarter has only reinforced the fact that India should be the fastest growing large economy in the world for the next few years. The strong win for the ruling party in the just concluded state elections has also reinforced the views that there will be continuity of the Modi government for the third term in the elections to be held in 2024. Corporate earnings have trended better than expected, providing fundamental support to the markets.