Benchmark sensitive index Sensex was among the top performing indices globally during May, and this momentum is expected to continue in the next two- three years, says a report. The one month return of S&P BSE Sensex stood at 3.9 per cent, while for South Korea's Kospi it stood as high as 6.1 per cent, for FTSE it was at 4.1 per cent and Hong Kong's HangSeng at 4 per cent, the research note by ICICI Prudential AMC said. Returns of the benchmark index are absolute returns calculated between April 30 to May 31, 2017. "From a global context, India stands out for three reasons – stable macros, prudent fiscal and monetary policies, and gradual but steady pace of reforms," the report said and added that with the implementation of Goods and Services Tax (GST), there is huge expectation of the tax base increasing and a larger part of the economy coming under taxation. In India, among the market-cap based indices, large-cap index continued to outperform. While returns for BSE Sensex stood at 3.9 per cent, for BSE mid cap it was at (-) 1.1 and for BSE small cap it was (-) 1.8 per cent. "We recommend that investors continue to maintain over- weight exposure in equities. Reasonable growth is expected from equity markets over the next two-to-three years," the report added. Meanwhile, the benchmark indices of China, Brazil and Russia gave negative returns of (-) 1.1 per cent, (-) 3.9 per cent and (-) 5.2 per cent respectively.
India has gained significant traction among the investing community globally as the policy environment has been improving. "The interest of foreign investors can be gauged from higher level of foreign direct investment. It has now again reached around 2 per cent of GDP," the report added.
Up 23% in last 5 mnths
Global stock markets scaled up nearly 15 per cent with benchmark indices in five countries including India seeing movement of above 20 per cent, in the five months ended May 2017, and the momentum is expected to stay going forward, says a report. According to Care Ratings analysis of movement in stock market indices for 33 countries, the median value of change in these indices was 14.9 per cent, for the five month period December-end 2016 to May-end 2017. Of these, five countries -- Poland (30.2 per cent), Argentina (29.6 per cent), South Korea (25 per cent), Turkey (24.2 per cent) and India (23 per cent) -- saw upswing of more than 20 per cent in their respective indices. While Indian securities have been buoyant this year with the stock indices scaling new heights, the analysis shows that the phenomena is not quite singular and is being observed in a large number of countries. "While the (Indian) performance has been impressive, it is also interesting to note that stock markets world over have also been witnessing impressive upswings as the global environment too has turned positive with both World Bank and the IMF projecting better prospects for 2017 though no major turnaround is expected," Care Ratings said. India is followed by Denmark (19.9 per cent) Mexico (17.8 per cent), Chile (17.2 per cent), Germany (17.1 per cent) and Singapore (16.4 per cent), in the top 10-list. Besides, benchmark indices in Taiwan, Hong Kong, France, Netherlands, Switzerland, Belgium, Italy, Sweden, Malaysia, Israel and Britain, have also seen double digit growth, for the period under review. The report noted that the "overtly buoyant sentiment" in India was driven by some positive economic numbers in the areas of GDP growth and industrial production, large foreign flows in both equities and debt, powerful show by the Narendra Modi-led government in the state elections, passage of critical reforms including GST and forecast of good monsoon, among others. "These pointers have more than offset the negative fallout of the demonetisation policy undertaken last year as well as low investment rates in the economy," Care said. Comparatively, India's neighbour China figured among the bottom three countries on the list with its indices rising meagre 2.4 per cent, for the period under review. China is followed by Canada (32nd rank) and Russia (33rd rank) as their indices declined by 0.3 per cent and 8.6 per cent respectively.