Chart Beat: India's share in global market cap hits a peak

Despite a shaky global economy, the Indian equity market stood on a firm footing in calendar year 2023. Benchmark indices Nifty50 and S&P Sensex scaled new peaks fetching double digit returns. Consequently, India’s share in global market capitalization climbed to an all time high of 3.8% in December, showed an analysis by Ltd.

This reading has been hovering above its historical average of 2.6% in the recent past. A slew of positive domestic factors along with robust liquidity inflows by foreign and domestic investors came as a boost. Expectations that the US Federal Reserve could begin its interest rate easing cycle in 2024 could keep sentiment in the equity market upbeat.

However, on the flipside, there could be nervousness among investors in a run up to the 2024 general elections. Plus, valuation wise India remains an expensive bet with one year forward price to earnings multiple at a premium to Asian peers..