How India Outperformed the World

Your 30-Year Guide

Wednesday, 3 Sep 2025

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Good evening, WeekendInvestor

The Enduring Strength of Indian Stock Market Returns

A Look at 30-Year Global Returns 🌏📈

Many people wonder about the performance of the Indian stock market, often concerned that its growth is inflated by the devaluation of the rupee. However, a look at the past 30 years tells a different story. When comparing annualized returns of 14 countries in U.S. dollar terms, India stands out.

In fact, India's stock market has delivered an impressive 13.5% annualized return over the last three decades, a figure that is a "like-for-like comparison." This data shows that India's performance is not just due to currency fluctuations, but is based on fundamental growth.

Volatility and Growth: A Trade-Off

While India's returns are exceptional, its market has also experienced significant volatility. The annual volatility for India has been one of the highest at 25%, which is slightly above the average range of 19% to 20% for other markets.

However, this higher volatility is often a characteristic of a growing market. The rapid growth provides opportunities for investors, but it also comes with greater price swings. This is a common trade-off for investors seeking high-growth opportunities.

Key Takeaways for Investors

  1. India’s Outperformance: In U.S. dollar terms, India's stock market has been a top performer over the last 30 years, giving it a double-digit return alongside only Taiwan and the US. This suggests that the Indian market's growth is solid and not a result of currency devaluation.

  2. Growth vs. Maturity: Unlike mature markets where rapid growth can be elusive, the Indian market offers significant potential for new investors. The past 30 years have shown fantastic growth, and this trend may continue for the next 10 to 20 years, making it an excellent opportunity for long-term investors.

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What To Read This Week ?

Today’s Market Update

The Indian stock market had a surprisingly positive session today, closing higher despite global worries about tariffs and trade restrictions from the US. The Nifty gained 0.5%, while midcaps, small caps, and the Nifty Bank also showed strength.

  • The Nifty held strong support near 24,400, a level tested several times in recent weeks.

  • Nifty Junior rose 0.66%

  • Midcaps gained 0.67%

  • Small caps surged 0.84%

  • Nifty Bank added 0.76%, holding a steady range.

  • One of the biggest headlines of the day was gold’s massive rally. Prices shot up to ₹10,604 per gram in INR terms and $3,540 per ounce in US dollar terms, breaking the critical $3,500 resistance.

Other Market Triggers

  • Ola stock surged another 11%, climbing from ₹40 to ₹70 in less than three weeks.

  • Other gainers included HDFC Bank, Mahindra & Mahindra, Titan, JSW Steel, and Coal India.

  • The only weak spot was IT stocks (-0.74%), as fears linger that services may be hit by tariffs.

What to watch next ?

  • In a key development, SEBI announced regulation of pre-listing trades in IPO-bound firms. This move will bring transparency and safety for investors by ending unregulated gray market deals. Such regulation is expected to add liquidity and trust in the IPO process.

  • There is ongoing uncertainty about US tariffs, especially on services. Analysts believe the final outcome may come by mid to late October when the US Supreme Court takes up the matter.

  • Until then, existing tariffs remain in force. Markets seem to be pricing in some relief, and an interest rate cut expected in mid-September is also adding optimism.

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Meme Of The Day

Based on the 30-year data showing India’s market returns outperforming many others in US dollar terms, has this changed your perception of the Indian stock market's strength?

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