In March 2024, Indian equity markets underperformed many other developing economies, but the bond market remains resilient.
India's domestic equity market saw corporates raising only Rs 15,165 crore through equity issuances during March 2024, a dip compared to Rs 20,869 crore during February 2024. Though India's Nifty and Sensex registered gains of 1.6 per cent each, respectively, in March, according to the Securities and Exchange Board of India (SEBI) in its monthly bulletin, many BRIC nations and developed markets outperformed it.
The P/E ratio of S&P BSE Sensex and Nifty both rose around 0.8 per cent to 25.0 and 22.9 respectively, in March 2024 compared to the previous month. PE ratio is an indicator of the stock market or an index or a stock being expensive or cheap and the rise in PE ratio shows that shares are getting overvalued compared to their Earnings per share.
According to the latest Asian Development Outlook (ADO) report, Asia is expected to have a growth rate of 4.9 per cent this year and the next year much lower than India's 8.1 per cent. Fitch Ratings has increased its 2024 global GDP growth forecast by 0.3 percentage points to 2.4 per cent, due to the better near-term world growth prospects. Except for Brazil, benchmark indices of all BRICS nations have increased.
Among BRICS nations, India's Nifty Index registered a 1.6 per cent increase during the month, underperforming other emerging economies like Russia (2.3 per cent) and South Africa (2.5 per cent).
Among the selected developed markets, Germany's DAX recorded a rise of 4.6 per cent followed by UK UKX (4.2 per cent).
India's 10-year government bond yield stood at 7.1 per cent reflecting an investment-friendly environment compared to many other BRICS nations. Among BRICS Nations, the highest 10-year government bond yield was observed in Russia (13.99 per cent), followed by South Africa at 12.3 per cent, Brazil at 11.1 and then India. China's yield is far lower at 2.3 per cent.
In the debt category, while corporates raised 1,01,067 crore raised through private placement, Rs 703 crore was raised via public issuances up from Rs 8,276 core and Rs 517 crore respectively in February 2024.
A surge in demand accounts, with NSDL adding 3 lakh and CDSL adding 28.2 lakh accounts was recorded during the month. The total number of demat accounts reached 3.6 crores with NSDL and 11.6 crores with CDSL on March 31, the Sebi bulletin said.
Foreign Portfolio Investors (FPIs) remained bullish as they made net investments of 51,966 crore in March 2024. Out of this amount, Rs 35,098 crore was invested in equity and Rs 818 crore was invested in hybrid securities. Also, the debt segment saw a net inflow of Rs 13,602 crore, while the debt-VRR segment witnessed a net inflow of Rs 2,478 crore.