Will India see all time new high in 2011? If one just started to invest in Indian equities in Q1,2011 (like me), then he / she would wonder why India is called an 'emerging market' in stock markets world? So, not many to see all time new high on Nifty / Sensex in 2011.
One has to carefully see what has happened over past 3 months in Indian National Stock Exchange / Sensex which represents broader market movement. Well, to no one's surpsie now, Indian stock markets in 2011 are currently down approx 12-15% YTD which if annualized on this basis would give 50-60% negative returns for 2011! Mind you, that is going to another crisis!!
Indian stock market vs. other emerging markets in 2011: The damage is not so severe across emerging markets as China's stock markets is positively flat (+3% YTD), Russian stock exchange are +5%, while MSCI Emerging Markets Index is up ~10% YTD!
Will developed markets yield better returns than Emerging markets in 2011?
No black n white answer possible today given so many macro headwinds & uncertainities, however, so far in 2011 developed markets have outperformed emerging markets. See some selected markets:
US: +15% YTD (S&P 500)
UK: +10% (FTSE MIB)
France: +8% (CAC 40)
Germany: +8% (DAX)
So, having seen such a dramatic quarter in 2011, and flattish outlook for emerging markets for rest of 2011 while developed markets might see more momentum in coming months, the trend of emerging markets outperforming developed markets might be reversed.
For reference, here is the data on previous 4 years for EM vs. DM:
2007: EM 44%, DM 9%
2008: EM -54%, DM -41%
2009: EM 81%, DM 32%
2010: EM 123%, DM 50%
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