Indian vs US stock market: How Dalal Street performed against global markets in Q1CY24?

Indian stock market vs US stock market: On account of a strong rally in the small-cap and mid-cap indices during the January to March 2024 quarter, small-cap and micro-cap indices on Dalal Street have outperformed their counterparts in the global market, which includes Wall Street. The Nifty 500 index has risen to the tune of 6.40 percent in YTD time whereas the Nifty Next 50 index skyrocketed to the tune of 17.50 percent in CY24. The Nifty Small-cap 250 and the Nifty Micro-cap 250 indices have shown growth of over 85 percent and 63 percent for the past year, respectively but these indices witnessed zero returns in March 2024.

Indian vs US stock market

However, the frontline indices of the Indian stock market failed to outperform major indices of the US stock market in 2024. The Nifty 50 index has surged 6.40 percent in YTD, the BSE Sensex has shot up to the tune of 2.73 percent in 2024 whereas the Bank Nifty index has added around 0.54 percent. In the broad market, the BSE small-cap index shot up over 7 percent in YTD whereas the mid-cap index registered a 10.24 percent rally in the year 2024.

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At Wall Street, the key benchmark index S&P 500 registered a 9.73 percent rise in YTD, tech giant Nasdaq index logged over 10 percent rise in 2024 while the Dow Jones index surged 3.15 percent in the current year.

So, frontline indices of the US stock market outperformed key benchmark indices of the Indian stock market in 2024.

How Dalal Street performed in Q1CY24?

According to Motilal Oswal Asset Management Company’s Global Market snapshot report, Nifty Next 50 has continued its streak as the top performer with a 2.8% growth. The index has seen consecutive growth during the last 3 Months, 6 Months, and 1 year of 13.65%, 34.61% & 60.39% respectively. Nifty Smallcap 250 and Nifty Microcap 250 indices have shown growth of 85.12% and 63.07% for the past year, respectively. However, these indices witnessed -4.24%, -6.22% change respectively for March 2024.

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“The auto sector continued its upward trajectory and surged by 4.9%, leading as the top performer, while the IT index saw a 7.5% decline, marking it as the worst performer. Also, in FY24, the realty sector soared with a remarkable 132.5% return, securing its position as the top-performing sector of the year,” Motilal Oswal AMC’s Global Market snapshot report added. The report went on to add that all the factor-based investment strategies, except quality, yielded positive returns. The Momentum factor took the lead with a notable increase of 2.6%. The Financial Services, Consumer Discretionary, and industrial sectors were the top three contributors to the overall returns of the Nifty 500, resulting in a positive impact of 1.1%.

Global markets update

“In the US, S&P 500 and NASDAQ 100 both experienced 3.1% and 1.2% gains respectively in March 2024 with all the sectors contributing positively to the S&P 500’s rise. Taiwan led the emerging markets achieving a 6.6% growth, while Germany & UK emerged as the top performers among developed markets, each experiencing a 3.8% increase,” Motilal Oswal AMC’s Global Market snapshot report said.

The report went on to add that crude oil prices surged for the third consecutive month, climbing by 6.3% in March. The recent surge has been due to Ukraine’s drone attack on Russian refineries and extended production cuts by OPEC. In March 2024, the yellow metal reached a new all-time high and witnessed a rise of 8.1%. In FY24, Bitcoin rose by 150.2% and Ethereum by 100%, showcasing notable growth in the cryptocurrency market.

Triggers for the Indian stock market

Asked about the reasons that fueled frontline indices and broad market indices of the Indian stock market, Sandeep Pandey, Founder of Basav Capital said, “After record GST collection and attractive forecast for the Indian economy by the Reserve Bank of India (RBI) in recently ended monetary policy committee (MPC) meeting, the market is expecting strong Q4 results 2024 from the Indian companies. Banking and finance, auto, infrastructure, and manufacturing sector is expected to dominate the growth story in India in the next two years.”

The Basav Capital founder and Former Deputy Vice President of HDFC Bank went on to add that a rally in the small-cap, micro-cap, and mid-cap indices should be seen as a signal of the rising Indian economy as large-cap companies are home to such companies for gaining domestic business. He said that most of the major economies in the global markets are reeling under shoddy economic conditions, especially the inflation concern.

“Even though the US Fed is signaling the end of the high-interest rate regime, the US Central Bank officials are a sign of giving any timeline for an interest rate cut. On the other hand, the market is expecting interest rate cuts to the tune of at least one percent by the end of 2025 in India after the recently ended RBI monetary policy meeting last week,” said Sandeep Pandey.

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