Since mid-August, Indian markets have outperformed most major global peers on the back of an improving macroeconomic outlook, continued buying by foreign portfolio investors (FPIs) and a pullback in commodity prices.
Global markets are falling on expectations the Federal Reserve will raise interest rates. However, the Indian market did not fall like the global stock market but quickly recovered from losses in subsequent trades.

Since mid-August, the Dow is down 8.8%; the S&P 500 is down 9.22%, the Nasdaq is down 12%, the FTSE 100 is down 3.2%, the CAC is down 7.4%, the Dax is down 7.5%, the Nikkei It fell 4.3%, while the Hang Seng lost 3.2%. Meanwhile, Sensex and Nifty fell just 1%. Both benchmarks are up 1.8% so far this year. While all of these major indices are down 1-25%.

“Clearly, India seems to be enjoying the TINA (There Is No Alternative) factor as all countries face attrition. India appears to be the best jurisdiction in terms of growth and inflation prospects for FY23. We are also very Optimism as China also faces a bleak outlook against the backdrop of a collapsed construction industry,” said a report by SBI Ecowrap.

News reports suggest China is facing weak demand, uncertainty over China’s zero covid policy, a housing crisis and tight energy supplies. Additionally, the ongoing lockdown in China due to the coronavirus has forced many factories to close. Analysts said Apple’s recent announcement that it plans to manufacture the iPhone 14 in India is a huge boost for India’s manufacturing industry.

India’s relatively strong performance over the past few weeks may reflect investors’ belief that the Indian economy is in a relatively favourable position relative to other countries, according to data from Kotak Institutional Equities.

Recent better-than-expected data, such as purchasing managers’ indices and auto sales, showed signs of improvement, while analysts expect retail inflation to moderate in the coming months. With the arrival of the festival, the demand situation will further improve. The recent global oil and commodity prices may have improved India’s near-term macroeconomic outlook. However, the global energy outlook is full of uncertainty. In addition, purchases initiated by foreign investors also improved investor sentiment. In August, FIIs bought $6.6 billion in stock.