At a time when most of the major?stock market?indices around the world are bleeding amidst soaring commodity prices fuelled by the Russia-Ukraine war,?recession?fears, back-to-back interest rate hikes, and inflationary concerns, India¡¯s Sensex has been an outlier.
With a nearly 7% year-to-date (YTD) rise, the?Sensex is currently the best-performing major index in the world this year.
The increase is in sharp contrast to?most global indices, which are deep in the red.
Like other stock indices globally, India¡¯s?Sensex?too was hit by the global downturn, falling to its 1-year low on June 17, hitting the 50,921 mark.
Sensex has gradually recovered amid this tumultuous year and now surged to hit its new all time highs. BSE Sensex closed at?63,284.19 today.?Nifty50 too has hit its new all time highs this week, and is up over 6.73% this year till date. Nifty50 closed at?18,812.50 today. Besides them, many other Indian stock market indices are soaring, like Nifty100 is up 6.15%, Bank Nifty is up 18.78% this year and BSE 100 is up over 7% this year till date.
In contrast, in the US, Dow Jones is down over 5% YTD, the broader S&P 500 has slipped nearly 15%, while the tech-heavy Nasdaq Composite has crashed over 27% this year till date.?
On the other hand, Japan's Nikkei is down more than 3% YTD, while Hong Kong's Hang Seng has plummeted nearly 20%. China¡¯s Shanghai Composite Index is also down over 15% this year till date.
Now it remains to be seen whether India¡¯s stock market continues to soar higher, or the ¡®bubble¡¯ is just waiting to burst.
But at present, a question that pops up in our minds is why and how are Sensex & Nifty50 soaring and touching their new all time highs when most other major indices are still in red??
Also Read:?Explained:?Sensex, Nifty & Their Role In India's?Stock Market
As per the report, market players say that Indian stocks have outperformed global ones because of relatively steady macroeconomic conditions despite the external turmoil. Market analysts say that the GST collection increase, capital expenditure and credit demand, and easing of inflation are some factors that point to steady economic growth, as per the TOI report.
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Market players said that the growing SIP contributions and buying by domestic institutional investors amid a nearly Rs 1.3-lakh-crore selloff by foreign funds in the year has boosted Indian stocks. "Strong support for the markets now has started coming from foreign investors who have largely missed out on this rally," V K Vijayakumar, chief investment strategist at Kerala based Geojit Financial Services reportedly said.?
In October 2022, SIP inflows touched their record high of over Rs 13,000 crore, as per AMFI data.
Prices of raw materials like rubber, which had surged in the first half of the year, too are easing globally, aided by China's rigid Covid restrictions. "The slump in?oil prices?to around $80 per barrel is a huge positive for our oil-import dependent economy," Siddhartha Khemka of Motilal Oswal Financial Services said, as per the report.??
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