India's stock market has outperformed global peers with a stellar 18% annualised return in US dollar terms over the last five years, according to a report by Bandhan Mutual Fund. This return surpasses the 12% gains of world and developed markets and is over four times higher than those of other emerging economies.
In contrast, China&rsquo;s markets fell by 2% in May 2025, making it one of the worst-performing major economies for the month.
India&rsquo;s outperformance was led by small-cap stocks, which have consistently outshone other segments since March 2020. Mid-caps followed closely, while large-caps lagged, indicating increasing domestic investor participation and appetite for risk.
From March to May 2025, Indian equities surged by 16%, significantly outperforming emerging markets (5%) and developed markets (2%).
Key performing sectors in May included industrials, capital goods, and telecom, driven by strong earnings and favourable policies. Meanwhile, FMCG, healthcare, and IT saw modest gains; metal stocks slipped slightly, and utilities remained unchanged.
On the macroeconomic front, India&rsquo;s Services PMI rose in May, signalling a rebound in the services sector, although the Manufacturing PMI saw a minor dip.
Supportive macro indicators such as a weakening US dollar, softening domestic interest rates, strong earnings, and meeting the fiscal deficit target of 4.8% of GDP for FY25 added to investor confidence. The target for FY26 is set at an improved 4.4%.
Inflation showed positive trends, with food inflation falling for six straight months, although core inflation edged up slightly.
[Except for the headline, this article has not been edited by the Benefit News editorial team and is published directly from the IANS news feed.]
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India leads global markets with 18% returns in 5 years, driven by small-caps and macro strength.

India Tops Global Stock Returns with 18% Annualised Gains

India leads global markets with 18% returns in 5 years, driven by small-caps and macro strength.

June 13, 2025 | 23:21 IST

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