Indian versus. US stock market: How did Dalal Street do in Q1CY24 relative to international markets?

Indian stock market vs. US stock market: Dalal Street’s small-cap and micro-cap indexes have outpaced those of the global market, which includes Wall Street, thanks to a robust surge in the small-cap and mid-cap indices during the January to March 2024 quarter. While the Nifty Next 50 index surged to a whopping 17.50 percent in CY24, the Nifty 500 index has increased by 6.40 percent YTD. Although the Nifty Micro-cap 250 and Nifty Small-cap 250 indexes had grown by 63 percent and over 85%, respectively, during the last year, both indices saw no gains in March 2024.

US vs. Indian stock markets
But in 2024, the Indian stock market’s frontline indexes were unable to beat the main US stock market indices. The BSE Sensex has increased by 2.73 percent in 2024, the Bank Nifty index has gained around 0.54 percent, and the Nifty 50 index has increased 6.40 percent year to date. The BSE small-cap index surged more than 7% year-to-date (YTD) in the overall market, while the mid-cap index had a 10.24 percent increase in 2024.

On Wall Street, the major benchmark index, the S&P 500, increased 9.73 percent year over year. The tech powerhouse Nasdaq index increased by almost 10 percent in 2024, while the Dow Jones index increased by 3.15 percent this year.

Therefore, in 2024, major benchmark indices of the Indian stock market underperformed US-leading indexes.

What was Dalal Street’s Q1CY24 performance?
The Global Market Snapshot report from Motilal Oswal Asset Management Company indicates that Nifty Next 50 has maintained its position as the best performer, growing by 2.8%. Over the last three months, six months, and year, the index has grown consecutively by 13.65%, 34.61%, and 60.39%, respectively. The Nifty Microcap 250 and Nifty Smallcap 250 indexes have increased by 63.07% and 85.12%, respectively, during the last 12 months. But for March 2024, these indexes saw changes of -4.24% and -6.22%, respectively.

“The IT index suffered a 7.5% fall, making it the poorest performer, while the car sector maintained its upward track and rose by 4.9%, leading as the best performer. The real estate industry also had tremendous growth in FY24, returning 132.5%, solidifying its position as the best-performing sector of the year, according to Motilal Oswal AMC’s Global Market Snapshot report. The research continued by saying that all factor-based investing methods produced positive returns, with the exception of quality. With a noteworthy 2.6% gain, the Momentum component emerged as the leader. With a positive effect of 1.1%, the top three sectors contributing to the Nifty 500’s total performance were Financial Services, Consumer Discretionary, and Industrial.

Updates on global markets
“In March 2024, the S&P 500 and NASDAQ 100 had increases of 3.1% and 1.2%, respectively, in the US, with the S&P 500 seeing a positive contribution from all sectors. According to Motilal Oswal AMC’s Global Market Snapshot report, Taiwan topped the developing markets with a 6.6% gain, while Germany and the UK stood out as the top performers among developed countries, each with a 3.8% increase.

The article continued by stating that for the third straight month, crude oil prices increased, with a 6.3% increase in March. The prolonged production restrictions by OPEC and the drone assault by Ukraine on Russian facilities are to blame for the latest spike. The yellow metal saw an 8.1% increase and set a new all-time high in March 2024. Bitcoin increased by 150.2% and Ethereum by 100% in FY24, indicating a significant expansion in the cryptocurrency sector.

The Indian stock market’s triggers
When questioned about the factors driving the Indian stock market’s broad market and frontline indexes, “The market is expecting strong Q4 results 2024 from the Indian companies,” said Sandeep Pandey, Founder of Basav Capital, “following record-breaking GST collection and the Reserve Bank of India’s (RBI) optimistic outlook for the Indian economy in the recently concluded Monetary Policy Committee (MPC) meeting.” Over the next two years, the banking and finance, automotive, infrastructure, and industrial sectors are anticipated to lead India’s economic narrative.”

The founder of Basav Capital and a former deputy vice president of HDFC Bank continued by saying that a rise in the small-, micro-, and mid-cap indices should be seen as an indication of the strengthening Indian economy since these businesses are attracted to large-cap firms that are looking to expand domestically. He said that poor economic circumstances, particularly the worry over inflation, are plaguing the majority of the world’s leading countries.

“The US Central Bank authorities are not providing any indication of when interest rates will be lowered, despite the fact that the US Fed is indicating the end of the high-interest rate system. However, after the conclusion of the RBI’s monetary policy meeting last week, the market is projecting interest rate reductions in India of at least one percent by the end of 2025, according to Sandeep Pandey.