October went up a brilliant 4.5% on the indexes, taking the Nifty’s 2014 returns to 32%. The surge since Diwali has been over 500 points on an index that now promises to be the best year since 2009. The month had a number of trading holidays, including one for Maharashtra elections, but still, markets went up (mostly in the last 10 days). Japan’s QE announcement took markets up another 2% on the 31st, the last day of the month.
You could be bullish for India: it’s been doing well. In fact, in 2014, the returns on the index have been ludicrously oversized in comparison. The Nifty is really the only index that has a huge double digit return, among the big guys around the world. The US, even with all it’s new found growth, saw the S&P 500 up only 6% for the year.
(This is each index, in its own local currency)
And India is […]
The markets have seen quite some euphoria over the last few months. Since May this year, the Nifty has been hitting unprecedented levels, touching an all-time high of 8173.9 at the close of the day of 8th September.
Ever since Election results came out in May, the markets seem to have taken very kindly to the mandate. The Sensex too saw an all-time high on the same day, hitting 27,354.99.
Since the Nifty is representative of all the industries put together, it would be interesting to see, sector-wise, which industries […]
You know how much inflation eats into your returns? This much: Adjusted for inflation, the Nifty is 10% lower than the highs we saw in 2008. Although the Nifty has moved 30% higher than the 2008 levels in “absolute” (i.e. not inflation adjusted terms). We take the Nifty (including the impact of reinvesting dividends) and show you how inflation has made all the difference:
Turns out that despite the recent drop in Gold price, the best […]
The Nifty continues to “correct”, although it did rise marginally today. The recent Nifty “peak” about 8173 has come after a long ride up.
(Click for a larger image)
This chart maps all the retracements that are 10% or more. You can see here that we haven’t had a 10% retracement in the last full year – and we have had at least one a year since 2007. It’s really a very non-volatile market.
Nifty EPS Growth drops suddenly to 10% in the last few days. The trailing 12 month P/E (non consolidated) is at 20. This kind of thing happens a lot; but it’s remarkable that for the last seven years, our P/E ratio never went below our EPS growth rate (trailing).
Even the five year compounded growth rate on EPS is still at 11.4%, which is quite low considering these are the top companies in the country.
When you adjust the Nifty for inflation, you might see how high the Nifty really is in comparison with the past. That is, even with today’s Nifty value at all time highs, is it really an all time high if you considered the value of the rupee has fallen due to inflation?
Looking at the Nifty (with reinvestment of dividends) since 1999, we can use a single reference point and adjust all numbers for inflation. If we look at the numbers, both raw and adjusted, here’s what the graph looks like:
June turned out to be a pretty good month for markets. The Nifty went up 5.3%, and ended above 7600.
This takes 2014 to a +20.7% year to June, the second best in the last 15.
And the Sensex did pretty well too, with a +4.9% in Jun 2014
How volatile markets were and how little they are today is visible on a graph of large moves. How many times has Nifty fallen 4% in a single day? 66 times.
How many times since 18th August 2009? Twice.
There has been calm. And this is true of world markets.
The storm, though, is ahead of us, and when it comes, it will seem to be a “black” swan. But if you are a student of history, the volatility is just about waiting […]
Two things have happened recently that have produced a small scare.
One, that Mark Carney, governor of the Bank of England, has said interest rates could rise sooner than markets expect. British rates are 0.5%. But they have a housing bubble going on, even as the economy is recovering. These point to the fact that rates will have to be increased as things continue to improve, and to avoid asset bubbles – and sooner than anticipated.
The Nifty, Year to Date, till May has had the second best return since 1999, eclipsed only by the stellar return in 2009.
Will it sustain?
In most earlier years that have seen more than 10% returns YTD in May, the momentum has sustained – 2009 ended up 40%. The years 1997 and 1999 ended up even higher than their May returns. 1996 was the outlier, starting at +20% in May and ending up -1%.