Growing, but there are nuances: what you need to know about the Indian stock market

Retail investors are actively interested in India's growing economy and its booming technology sector. However, there are many reasons

In 2022, growth was observed only in a few equity markets. Commodity-exporting countries such as Brazil, Indonesia and the Gulf States, which have benefited from energy shortages, have fared well on the stock exchanges. But there is also an unusual case: India. At the end of November, the Indian stock market indices NIFTY 50 and SENSEX hit record highs. Over the past year, shares of Indian companies have grown by 4% in local currency. And this despite the fact that, on average, the world's securities of companies traded on the stock exchange fell by 20%.

All this may mean that the Indian market has prospects. Investors are reconsidering their positions in the largest emerging market - CHINA. Despite the fact that the country's stock market reacted positively to the news about the easing of the "zero tolerance" policy for covid-19 , the MSCI China index has decreased by a quarter since the beginning of 2020. As a result, its average annual return has fallen below 1% over the past decade. Many managers see India as a more attractive place to diversify their assets.

However, the Indian stock market has its own problems that make it a less likely safe haven candidate.