- NEW DELHI — The Indian stock market has delivered stellar
performance over the last five years, generating 18 per cent annualised returns
in US dollar terms -- the highest among global markets, a new report said on
Friday.
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- India’s long-term outperformance stands out as it surpasses
the 12 per cent returns delivered by world and developed markets and is more
than four times higher than those of other emerging markets, according to data
compiled by the Bandhan Mutual Fund.
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- In sharp contrast, China’s markets declined 2 per cent in
May 2025, making it one of the few major economies to end the month in the red.
Also read: India’s CPI inflation falls to 2.82 pc in May, lowest since February 2019
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- Small-cap stocks have played a leading role in India’s
growth story, outperforming across the board -- whether over the last three
months, five years, or since the pandemic lows of March 2020.
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- Mid-caps followed close behind, while large-caps trailed,
highlighting the rising risk appetite and growing domestic investor
participation in broader segments of the market, the report said.
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- Between March and May 2025, Indian equities surged 16 per
cent, far ahead of the 5 per cent gains in emerging markets and just 2 per cent
in developed and world markets.
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- The report noted that India continues to attract investor
confidence despite global uncertainties and headwinds, as per the report.
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- Industrials, capital goods, and telecom sectors were top
performers in May, supported by strong earnings and policy tailwinds.
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- In contrast, defensive sectors such as FMCG, healthcare, and
IT posted modest gains. Utilities remained flat while metal stocks declined
slightly.
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- On the macroeconomic front, India’s Services PMI rose in
May, signalling a recovery in the services sector.
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- However, the Manufacturing PMI dipped slightly, pointing to
a marginal slowdown in industrial output.
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- A weaker US dollar, easing domestic interest rates, and
earnings that largely met expectations also contributed to strong market
sentiment.
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- India’s fiscal deficit target for FY25 was successfully met
at 4.8 per cent of GDP, with a further improvement projected at 4.4 per cent
for FY26.
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- Inflation trends are encouraging too -- food inflation has
declined for six consecutive months, though core inflation ticked up
marginally.
