Indian Markets Underperforming US Markets This Year

NEW DELHI, (IANS) – An important feature of the market performance this year is India’s underperformance relative to the US, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

While the S&P 500 is up 17.6 percent YTD, Nifty is up only 6.3 percent YTD. Relatively high valuations in India are constraining a strong rally, he said.

Of late, the poor monsoon this year, till now, is also emerging as a major worry, he added.

In the near-term market may remain steady on favorable global cues. The US consumer index indicates that the US economy is slowing down. If the payroll data expected this September 1 confirms this trend, the Fed will not resort to another rate hike soon.

This assessment has led to a decline in US bond yields and the dollar index, which, in turn, has improved equity market sentiments. A declining dollar is favorable for gold. Capital goods are a strong segment in the market now. A matter of concern is the poor quality of stocks participating in the mid-and small-cap rally, he added.