India's markets amid history's ups and downs

How the BSE Sensex has performed amid wars, scams, terrorist attacks and policy changes

- SAMIE MODAK

India's equities have been a remarkable success story over the past four decades, reflecting the nation's economic progress.

The equity market has delivered exceptional returns, outpacing global peers. Meanwhile, India's regulatory framework and infrastructure have evolved into some of the world's most efficient.

Since 1979, the base year for the Sensex, India's 30-share benchmark index has surged nearly 700 times, achieving a compounded annual growth rate (CAGR) of 15 per cent in local currency. For context, the S&P 500 grew about 50 times, Japan's market 6.4 times, Malaysia's 9.5 times, and Germany's 33 times over the same period.

"In the last 20 years, India and the US have been the only large equity markets to give double-digit compounding," says Saurabh Mukherjea, chief investment officer at Marcellus Investment Managers. He says this highlights the importance of competition and contestability, both in the economy and politics.

"Although a highly contested democracy may appear unsettling to investors who prefer efficient dictatorships, the consistent question is: 'where are the returns?'," The Chinese stock market has compounded at less than half the rate of India's market in the last 20 or 30 years, he says.