Amid coronavirus led mayhem which spurred stock market rout, Indian equities dropped out from the top 10 equities market globally. Also, the country's home currency Indian rupee also lost significantly signifying a threat to the Indian economy.
In dollar terms, value of all shares or total market cap of India lost a staggering 27.31% from the start of the year which in the first month ranked 10th with a market cap of $2.16 trillion. In the preceding year in the same month, India's stock market combined m-cap stood at seventh spot with a market cap of $2.08 trillion.
But in the current scenario, when the Indian stock markets have entered a bearish territory, it now ranks 11th with a combined m-cap of $1.57 trillion.
On the biggest single day decline i.e. on March 23 when the stock market witnessed bloodbath, m-cap was barely at $1.31 trillion.
"The final bottom in the four previous falls took 10-27 months versus less than three months in the ongoing fall. Some of the sentiment indicators that have high accuracy in predicting bottoms have yet to convincingly signal one in the ongoing correction", CLSA said saying it to the fourth such instance when stock markets have tumbled up to 40%.
So, amid the sell off, India's contribution to the world market cap stands at just 2.18% which during the start of 2019 was at 2.97%. On April 24, 2020, Sensex ended at31,327.22, which is down 24% since the start of 2020.
Interestingly, this cycle of at least 35% decline in the markets every once in a decline and takes about 12-14 months for the markets to bottom out. And the average time the market takes to recover to their all time highs is 16-18 months.
"Indian markets tend to recover faster than US or other developed markets. It is possible that cycles could have got shorter and sharper both on the way down & way up," said analyst at Ambit Capital.