The Indian stock market’s share of global market capitalisation has slipped to a multi-year low after logging its worst monthly performance in six years in March. The decline reflects the continued underperformance of domestic equities, even as peers in Asia and the West have outpaced gains and expanded their global share.
According to domestic brokerage firm Motilal Oswal, India’s share of global market capitalization dropped to 3% in March 2026, marking a three-year low and a decline from 3.3% in February 2026. India remains among the top 10 contributors to global market capitalization, and at its peak in September 2024, its share had reached 4.6%.
The US held the largest share of global market capitalization at 47% in March, followed by China at 9.3%. Japan and Hong Kong ranked next with 5.3% and 4.9%, respectively. With a market capitalization of $4.4 trillion, India stood in fifth position, the report showed.
The global market capitalization has risen by 20.2% (USD 24.4 trillion) in the last 12 months, while India’s market cap has declined by 10%.
The report showed that Korea recorded the highest increase in market cap at 93%, followed by Taiwan (59%), Brazil (33%), China (32%), Japan (21%), and the US (18%). Except for India, all major global markets have seen an increase in market capitalization over the past year.
Meanwhile, the MSCI India Index has declined by 13% in the last one year, underperforming the MSCI Emerging Markets (EM) Index, which gained 27% during the same period. However, over the long term, the MSCI India Index has outperformed the MSCI EM Index by 27% over the last 10 years.
Nifty 50 drops over 11% in March
The sustained rise in crude oil prices throughout March, triggered by escalating tensions in the Middle East, has heightened fears of prolonged inflation and possibly higher interest rates and has triggered a wave of selling across sectors, causing the Nifty 50 to plunge 11.3%, marking the biggest monthly drop since March 2020 and extending its losing streak to a fourth straight month.
The decline is not just limited to India but has been felt across global markets, with Korea (-19%), Indonesia (-14%), Taiwan (-10%), Germany (-10%), the UK (-7%), China (-7%), the US (-5%), and Brazil (-1%) all ending lower.
War-related concerns have also prompted overseas investors to turn net sellers in March, ₹1.17 lakh crore”>withdrawing a record ₹1.17 lakh crore, as per NSDL data. These outflows have not only impacted equities but have also put pressure on the rupee, which slipped to an all-time low of 95 against the US dollar.
India remains highly vulnerable to rising crude oil prices, as it imports nearly 85% of its oil requirements. A sharp spike in prices could fuel inflation and dent the earnings of companies that rely heavily on crude oil as a key raw material, while also potentially prompting the RBI to hike interest rates.
Are valuations now attractive after the recent market fall?
While the recent crash pushed equities to multi-month lows, it has, however, helped ease valuation concerns. The MSCI India Index is now trading at a 27% premium to the MSCI Emerging Markets (EM) Index, below its historical average premium of 73%, according to Motilal Oswal.
The Nifty 50 is currently trading at a 12-month forward P/E of 17.7x, below its long-period average (LPA) of 20.9x, implying a 15% discount. Further, its price-to-book (P/B) ratio of 2.6x represents an 8% discount to its historical average of 2.9x. Given these relative valuations, the brokerage finds greater value in large caps compared to midcaps.
Although markets typically recover over the long term, ongoing structural disruptions to supply chains and persistent inflation concerns are raising fears of prolonged market instability and delayed monetary easing.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
