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Facts Vs Opinions – Comparing Indian Equity Markets And US Equity Market Performance

Do you believe that Indian Equity markets are doing better than US equity markets? As far as I get the drift from the “news”, it seems Indian markets are on the roll, while global equity market, especially the US is doing bad. Let’s see if the numbers support this opinion!!!

Here’s what the numbers say***:

1 Year calendar year (CY) performance, basis Total Return Index (TRI):

-          NIFTY 500:           4.25%  

-          S&P 500:              -18.11   

 

Indeed, Indian markets have held up better. And hence all the noise about being an oasis in the desert!!!

What does 5 year horizon hold?

-          NIFTY 500:           11.52% 

-          S&P 500:              9.42%   

Indian equity markets still seems to be doing better than US. Yay!!!

Let’s jack up the horizon further. What does 10 year horizon returns tell us?

-          NIFTY 500:           13.72% 

-          S&P 500:              12.56%

Again, Indian markets are beating US markets comfortably.

OR DID THEY? Have we looked at the data appropriately?

Nops. We have overlooked one critical thing. Above ROIs, while true, are in different currency – Indian market returns are in INR while US ones are in USD. Effectively, the data shown above does not give the true picture. Let’s do the comparison in same currency – in INR. All credit to spglobal.com for proving returns data in various currencies.

1 Year calendar year (CY) performance:

-          NIFTY 500, INR: 4.25%  

-          S&P 500, INR:    -8.86%

Ok, on latest year basis, Indian markets are still doing good. Though INR depreciation against USD has tempered the underperformance of US markets.

What does 5 year horizon hold?

-          NIFTY 500, INR: 11.52% 

-          S&P 500, INR:    15.25%

The tables have turned now. US Markets have surged ahead of Indian markets, and that too by quite a handsome margin!!!

Checking the data for 10 year horizon:

-          NIFTY 500, INR: 13.72% 

-          S&P 500, INR:    17.30%

US markets are still way ahead of India markets. Much touted “growth” market has lagged the “stable” market!!!

It’s upto to an individual what to read in the numbers given above. But don’t miss to do the numbers before you act on numerous opinions floating around (including those on this blog). And never forget the timeless wisdom shared by Benjamin Graham  - “Don’t take 1 year results seriously”.

***Performance at the end of CY 2022. Data source is https://niftyindices.com/ and https://www.spglobal.com/spdji/en/

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