Indian equity market only loser among top 10 in last one month

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Published: July 16, 2019 12:52:17 AM

While the Indian rupee appreciated nearly 2% against the greenback in the last one month, euro and Hong Kong dollar gained 0.43%. and 0.08%, respectively.

Indian equity market, equity market, market news, share market, With this slide, the market capitalisation of companies listed on Indian bourses has eroded 14.3% from its peak that it had hit in January 2018. (Reuters)

India is the only market in the world to yield negative returns over the last one month, and this is despite the rupee’s strength. The country’s equity market, which ranked eighth among the top 10, has lost 2.8% of value in the past one month against 4.5% gains posted by the US market. Close on the heels came Canada and France, delivering a return of 4% each. Shares of Hong Kong-listed companies rose 3.9% during the same period, data sourced from Bloomberg revealed.

While the Indian rupee appreciated nearly 2% against the greenback in the last one month, euro and Hong Kong dollar gained 0.43%. and 0.08%, respectively.

With this slide, the market capitalisation of companies listed on Indian bourses has eroded 14.3% from its peak that it had hit in January 2018. India now boasts of a total market value of $2.11 trillion, which comprises 2.6% of the market cap of listed global equities. Shankar Sharma, VC and Joint MD at First Global, observes that the fall was because the market probably thought that the budget revenue estimates were too aggressive. The recent fall in the markets has also been exacerbated by the proposed tax on foreign portfolio investors.

The Nifty MidCap Index has given up about 3.2% since the last one month, and the Nifty Small Cap Index has shed 4.2%. Nearly 71% members of both indices have seen a fall in prices.

More than three-fourths of Nifty50 have lost value over the last one month. The 37 companies from the Nifty space, which lost anywhere between 0.11% and 19% in the last one month, collectively accounted for $48.8 billion worth of erosion in the market value. These include stocks like TCS, Reliance Industries, Wipro, ONGC, HUL, Maruti Suzuki, Titan Company, Coal India and many others.

“The market has any way been concerned about the general slowdown in economic and corporate profit growth. So, it was looking for an excuse to fall,” Sharma said.

India remains one of the most expensive markets in the world. At its close of 38,896.71 on Monday, the Sensex now trades at a price-earnings (P/E) multiple of 18.5 times to the estimated one-year forward earnings, against the long-term average PE of 16.9 times. This compares with 11.4 times for Kospi and 15.2 for Jakarta Composite. Russian and Turkish equities were the cheapest in the emerging market with a forward price-to-earnings ratio of 5.8 each, Bloomberg data showed.

All companies which are listed on the global stock exchanges have collectively gained 3.7% to 80.63 trillion in the last one month.

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