India Underperforms Global Markets In May’22; Earnings Provide Silver Lining

India underperformed in May'22, but still stands out and is outperforming global markets in CY22 till date, despite several macro headwinds, even as midcap/smallcap indices lag, THE May'22 edition of 'The Eagle Eye' says.

In less than six months, the under performance in IT has shaved off 300bp from its weightage in the Nifty, the report notes.

"Corporate earnings in 4Q and FY22 were resilient, with the Nifty EPS up 35% - the highest since FY04. Forward estimate revision for FY23 was stable. While GDP growth was muted at 4.1% for 4QFY22, the high-frequency macro data indicators show continued healthy trends (GST collection and PMI readings)," the report states.

According to the report, average daily cash volumes fell to Rs 619 billion - a five-month low, while non-institutional participation declined to 48% of total cash volumes in May'22 v/s 58% in Apr'22.