The NIFTY has remained in a consolidation of 200-300 points for the past 1 month, and as I mentioned in my previous article that the index could continue to consolidate for at least a week or two more in this range seems to have played out extremely well.
The Global Markets and the divergent mood across them is also one of the reasons for this ‘drag’ on the indices.
Table 1 is the snapshot of the YTD performance on the key global indices. This indicates that the First half of the indices including key Asian Markets such as HANGSENG, NIKKEI and SHANGHAI have underperformed significantly the other peers which have on an average given returns of almost 13-14% on a YTD basis.
The Table 2 on the other hand is all the more interesting as it points out the play for the global markets from their 2021 high, giving them a relative positioning w.r.t the strength these indices have shown.
This table as well indicates that even though DOW JONES is very close to its 2021 highs, but the DOW TRANSPORT INDEX is down 10% from its 2021 highs. The EUROPEAN indices such as CAC40, FTSE etc are down 3% from their 2021 highs. Asian indices such as HANGSENG, NIKKEI etc are also down 9-10% from YTD highs.
This indicates the divergent kind of performance between the global indices and NIFTY50. This, I believe, is also one of the other key reasons why NIFTY50 is remaining in a consolidation.
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Read More: The divergent global markets | Business News