Indian equities outperform Asian peers in October: Goldman Sachs

Indian equities ranked among the world's strongest markets in October as investors shifted away from AI-sensitive shares, according to a Goldman Sachs Research report cited on Monday, November 2. The Nifty exceeded the performance of the Asia-Pacific benchmark excluding Japan by seven percentage points during the month.

The report linked India's relative gains to money moving away from AI-sensitive North Asian markets. Within India, IT services companies outperformed the Nifty by 14 percentage points and led the sector rankings.

Inflows improve while valuation premium remains high

Companies classified as AI enablers moved in the other direction. After beating the Nifty by 76 percentage points between January and September, they lagged the benchmark by six percentage points in October.

The broader recovery followed a difficult third quarter in which the Nifty had dropped 10 per cent between its peak and trough. It subsequently rebounded three per cent from its early-October low.

In the week ending October 30, the Nifty rose two per cent, compared with a one per cent increase in the regional benchmark. Mid-cap and small-cap shares advanced three to four per cent, while pharmaceutical stocks gained seven per cent and financial shares one per cent.

Institutional buying also improved for Indian equities. Foreign institutional investors purchased $1.2 billion during the week, though their net withdrawals for 2026 still stood at $31 billion.

Domestic institutional investors bought $400 million in the same period. That took their total purchases during the year to $75 billion, according to the report.

Earnings data covered companies representing 58 per cent of the MSCI India index's market capitalisation. Their combined profits were running 15 per cent above the year-earlier period and 13 per cent above the preceding quarter.

The gains came alongside relatively high valuations. India's forward price-to-earnings multiple was 18.4, and its premium to the wider Asia-Pacific market reached 92 per cent, near historical highs.

Results were uneven across sectors, with more positive surprises in metals and mining, utilities and healthcare. Cement and materials, together with consumer discretionary companies, recorded more misses.

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