Global markets today: When the Indian stock market opened on Monday, the poor show of the key benchmark indices continued. After ending lower for the seventh straight week last Friday, the Nifty 50 index opened lower at 23,064 and touched an intraday low of 22,807 within a few minutes of the Opening Bell. The BSE Sensex also opened downside at 73,734 and touched an intraday low of 72,832 within a few minutes of the Indian stock market’s opening.
Nifty, Sensex deliver zero return in two years
While making this intraday low, the Nifty 50 index corrected from 26,179 to 22,807 over two years, losing 3,372 points, or 12.88%, in the process.
Similarly, the BSE Sensex crashed from 85,571 to 73,734 in two years, delivering a negative return of 11,837 points (13.83%) over this period.
However, the Bank Nifty index has delivered a positive return, rising from 53,834 to today’s high of 55,390, logging a 1,556-point or 2.89% rise over this period.
KOSPI, Nikkei, Nasdaq outperforms Nifty, Sensex
Interestingly, global peers of the Nifty and the Sensex have outperformed them by a wide margin in the last two years. The South Korean KOSPI index skyrocketed from around 2,650 to 6,890, delivering around a 160% return to index investors.
The Japanese Nikkei 225 index skyrocketed from 39,829 to today’s high of 67,034, logging a 27,205-point, or 68.30%, rise in the last two years.
Looking at the Wall Street indices, the tech-heavy Nasdaq has risen from 18,120 to 27,068, logging a 13,948-point or 106% rise over this period. Likewise, S&P 500 index has risen from 5,738 to 7,743 levels, clocking over 2,000 points or 35% rally in the last two years.
Pakistan’s KSE 100 index also outperforms Nifty, Sensex
While there is no comparison between the Indian and Pakistani economies, when it comes to money-making, the key benchmark indices have made their investors ultra-rich. In the last two years, Pakistan’s stock market‘s leading index, KSE 100, has risen from around 81,000 to 1,70,000, delivering a whopping 110% return to index investors.
Pakistan stock market’s leading index, KSE 100, has outperformed India’s Nifty 50 and Sensex in the last year also. While the Nifty 50 and Sensex shed over 7% in one year, Pakistan’s KSE 100 index has risen over 5% in one year.
Why KOSPI, Nikkei, Taiwan index outperform Nifty, Sensex?
Highlighting the reason for the key benchmark indices failing to match their peers in the global market, Sandeep Pandey, Co-founder of Basav Capital, said, “The initial reason for the Nifty 50 and Sensex failing to match their global peers can be attributed to the weakness in the Indian National Rupee (INR) against the US Dollar (USD). The Indian Rupee has been hitting new lows in the last two years, which has spurred outflow of foreign money from the Indian market.”
Sandeep Pandey of Basav Capital said that the free fall of the Indian Rupee hit FPI and FII returns, as they invest in USD terms. So, the rupee’s fall squeezed the foreign investors’ return.
Pointing towards the ‘Sell India Buy South Korea’ rant, Amit Goel, Chief Global Strategist at PACE 360, said, “The free fall in the Indian Rupee hit the risk-reward ratio of foreign investors negatively. In such a scenario, the AI boom came as a shocker for the Indian stock market, as in the AI theme, the Indian market was seen as a user, while the South Korean or the Taiwanese stock market was seen as a creator. So, the foreign money started to move from the Indian stock market to the South Korean and the Taiwanese stock market to cash on the AI boom.”
Why Pakistan’s KSE 100 outperformed Nifty, Sensex?
On key reasons for Pakistan’s KSE 100 outperforming India’s Nifty and Sensex, Avinash Gorakshkar, Founder of Avinash Mentor Research, said, “The key reason for the rally in the KSE 100 can be attributed to the economic stabilisation. In the last two years, Islamabad has secured around $7 billion in an IMF loan, which has anchored Pakistan’s economic progress. This ensured the easing of the monetary tightening policy, and the Pakistani banks moved from the high interest regime to a relatively lower interest rate regime, which bridged the demand and supply constraint in Pakistan’s economy.”
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
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