August made equity investors richer by Rs 13.66 lakh crore. Will India continue to outperform?

In July-end, the total market capitalization of BSE-listed companies was at Rs 266.58 lakh crore. A fortnight later on August 18, investor wealth hit a record high of Rs 280.52 lakh crore.

After a troublesome summer in June, July and August both proved positive for the equity market. In August, Nifty Smallcap and Nifty Midcap indices gained 5 per cent and 6 per cent, respectively, for the month.

Nifty Energy and Metal were the top sectoral performers gaining over 8 per cent each during the month.

Among the BSE500 stocks, the top gainers during the month were –

(44.9 per cent), (43.1 per cent), MAS Financial (39.1 per cent), (36.5 per cent), (34.7 per cent) and (32.7 per cent).

Wealth eroders include

(16.6 per cent), PVR (14.4 per cent), (11.6 per cent), (11.4 per cent) and (11.4 per cent).

On Tuesday, Sensex surprised by rallying over 1,500 points as massive short covering as well as value buying at lower levels helped indices recoup all the losses post the Jackson Hole event.

“We believe the Indian market will continue to remain the best performing equity market globally in CY22 supported by a higher earnings growth trajectory and moderation in inflation expectations,” said Aishvarya Dadheech, Fund Manager, Ambit Asset Management.

Nifty50 is trading at 19.5 times forward P/E compared with a long-term average of 21. India is trading at a 100% premium to MSCI emerging market indices versus the long-term average of 85%.

Dadheech said overall the Indian market is reasonably valued.

Technically speaking, all bullish eyes now will be on Nifty’s psychological 18,000 mark.

“A decisive move above 17900 levels could pull Nifty towards the next upside target of 18300-18400 in the next few weeks,” Nagaraj Shetti, Technical Research Analyst,

Securities, said.

Though India can’t decouple with the rest of developed and emerging markets, there is a strong expectation of relative outperformance on the back of improved macros.

“Add to it, the growing domestic investor community which has started to believe in the long term equity cult plus the return of foreign institutional investors, make India clearly a market to invest in. There will be days of heightened volatility due to a number of moving parts, but it has to be utilized as an opportunity to buy in adversity,” said Devang Mehta, Head – Equity Advisory, Centrum Wealth.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)