We have all gone crazy in 2022 about how strong our markets have been and how dominantly we have outperformed the rest of the markets. There’s some truth to it no doubt. But, reverting back to the mean is eventually inevitable and this time too it has been no different.
2022 has been an year of resilience for not our markets but our economy as a whole. Comparing to the shock and impact that rest of the world faced with supply chain issues and Inflation, we have been fairly insulated thanks to some bold moves by both RBI and surprisingly, Govt as well. Both our inflation and growth levels and even interest rates have been more or less (1% give and take) near the historical averages.
To give you all more context, we all had a discussion on the outperformance bit earlier
The same cannot be said for the other economies. With most of the world came in under severe shock with inflation, interest rates hitting multi decade highs and growth levels hitting multi year lows. Things were/are extremely tricky to say the least.
But even after all this talk of good performance and resilience, our markets are more or less are back to the mean mirroring returns of other markets albeit with lesser volatility.
Here’s some data
Comparison with other markets
6 Monthly returns - UK and Germany
1 Month returns - Hang Seng and US markets
1 Year returns - all the major indices
As we can see above, due to a lacklustre performance by nifty in the last few months undergoing massive consolidation and correction both time and price correction, we are more or less back to square one when compared with global returns.
When do you think we will see a sustained recovery in our markets??
