The last time the BSE Sensex crossed the 20,000 mark was on January 15, 2008, when it ended at 20,251 points. In the 32 months till date, the Sensex and the Nifty have given negative returns of a little over a percentage point each.
It?s been a tumultuous and erratic ride for our market, no doubt. But the journey has been even more painful for the world markets, which have been reeling from concerns of a prolonged slowdown, sovereign debt defaults and double dip recessions. In fact, only a handful of these markets have managed to outperform our benchmark indices.
In China, the Shanghai Composite has been languishing at the bottom of the heap among Asian markets with negative returns of more than 50%. The Chinese market has been largely spooked by the government?s decision to tighten monetary policy to stem a plausible realty bubble. Yet, at this point, the Chinese market looks quite expensive with a current PE of around 17-plus. But it is slightly cheaper than the Indian markets which are currently trading at price to earnings (PE) multiples of over 19.
Japan?s Nikkei 225 has not fared well either, with negative returns of 31%. The only two Asian indices that have beaten our key indices are South Korea?s Kospi and Indonesia?s Jakarta Composite, the most overvalued market in Asia with a current PE of 34.39.
Among world markets, Europe has been the leading laggards with the MSCI Euro and Euro Stoxx 50 Pr down more than 30%, and Germany?s Dax down 16% in the last 32 months. With the US economy sputtering back to some sort of normalcy, the country?s Dow Jones index has staged a decent comeback ? still it is down 13% below the 12,501 mark it had touched on January 15, 2008. Brazil?s Bovespa has climbed 13% in the same period, comfortably outpacing the India?s indices. It is interesting to note that Brazil was among the last countries to slip into recession and among the first ones to come out of it. Russia is reeling with the country?s MICEX index 25% in the red.