HomeMarket AnalysisIndia's m-cap drops 11%, steepest among top markets in Q1

India’s m-cap drops 11%, steepest among top markets in Q1

Indian stocks have seen an 11 per cent drop during the January-March quarter to date, making it the most significant drop among the world’s top 10 markets by value. The drop in aggregate Indian market capitalisation is the most significant since the March 2020 quarter when the Covid pandemic first emerged.

Foreign investors have continued to sell, leading to the decline in Indian stocks. However, global peers are in the green despite selling pressure due to central banks’ expectations of rate hikes to tackle inflation.

Both Sensex and Nifty recorded a decline of 3.8 per cent over the past week, and over the last month, they each suffered a drop of over 6 per cent. Year-to-date, the losses for the indices amounted to 5.4 per cent and 6.3 per cent, respectively.

Foreign investors have sold nearly $2.69 billion worth of Indian stocks this year, on top of over $17.21 billion in sales in the past year. In comparison, the US, the world’s most valuable stock market with a capitalisation of $41.90 trillion, gained 2.05 per cent in the March quarter.

China, the world’s second-biggest stock market with a capitalisation of $10.74 trillion, was up 5.9 per cent, while Japan ($5.53 trillion) gained 1.3 per cent. Hong Kong ($5.31 trillion) rose 1.6 per cent, and France ($3.1 trillion) climbed 8 per cent. The United Kingdom ($2.93 trillion) was marginally up 0.77 per cent, Canada ($2.68 trillion) lost 1 per cent, Saudi Arabia ($2.63 trillion) was up 0.13 per cent, and Germany jumped 8.64 per cent ($2.31 trillion).

Despite the drop in Indian stocks, analysts are optimistic that central banks, treasuries, and Deposit Insurance Corporations are taking swift action to mitigate the issue and expect it to be resolved soon. Unlike the 2008 financial meltdown, analysts note that there are no significant underlying problems to cause concern.

Priyanshi Mishra
Priyanshi Mishra
Priyanshi Mishra is a student of MA in Economics at the University of Lucknow. She has strong communication and content-writing skills.
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