The Hindu Business Line : Sensex, Nifty among world’s worst performers

Mumbai/Chennai, Feb. 22 Indian equities are among the worst performers in the global markets since January 2008. Among the major markets only Hong Kong markets have seen as much negative growth this year as the benchmark indices Nifty and Sensex.

Analysts feel the FIIs’ withdrawal is a major factor for the negative performance of the Indian markets. They also attribute the fall to corrections of other major markets in the last quarter of 2007. The best performing markets this year have been the markets in Middle East, Latin America and Africa.

The 50-share S&P CNX Nifty index of the NSE registered a year-to-date negative growth of 17.91 per cent while BSE Sensex was down by 15.67 per cent; only Hong Kong’s market has seen similar erosion in value, Hang Seng has lost 17.25 per cent.

Worst performers

Romanian, Vietnamese and Croatian market top the list of worst performing markets ahead of Nifty, Hang Sheng and Sensex.

Even among the BRIC nations – Brazil, Russia, India and China – India was the worst performer. While Brazil gave out a positive return of 5.30 per cent, China’s Shenzhen dipped 2.6 per cent and Russia-RTS declined 9.20 per cent.

FIIs net sellers

FIIs have been net sellers so far this year and have off loaded shares worth $2.86 billion (Rs 11,539 crore) from the Indian market. Last year the FIIs had invested $17.23 billion in the Indian market.

“The fall appears sharper because Indian market is the last where the FIIs pulled out while it began to happen earlier elsewhere,” said Mr Nipun Mehta, Co-founder & CEO of Unitis Tower Wealth Advisors, a private wealth management firm. “Secondly in the last quarter of 2007 Indian market didn’t fall rather gained while all other markets had fallen after the sub-prime crisis reports began to surface.”

Sachs sees fall

Leading investment bank Goldman Sachs has predicted a further fall in the Indian market as Indian equities remain expensive despite its recent fall as compared to corporate earning potential in 2008 and 2009 based on various macroeconomic factors.

China and India are the least preferred among BRIC nations, said a recent survey from Merrill Lynch.

Best performance

Muscat was the best performer in 2008 so far after it scored a return of 13.9 per cent, followed by Mauritius 11.2 per cent, Nigeria 11.01 per cent and Kuwait 10.8 per cent.

Even, the Karachi 100 index has performed better and has shown a positive growth of 5.92 per cent this year so far despite the political uncertainty in the country in recent times.

Japan’s Nikkei representing the second largest market in the world has shown a negative growth of 7.85 per cent. German’s Dax was down 14.21 per cent, French’s CAC index has gone down by 12.62 per cent and UK’s FTSE dipped by 9.53 per cent.

US better off

The US markets were better off than Asian markets with S&P 500 index reflecting a negative growth of 7.85 per cent, Dow Jones Industrial Average of 6.66 per cent and Nasdaq Composite index of 13.16 per cent as it faces the scare of big write-downs by the banks due to the sub prime lending as well as chances of the world’s largest economy entering a phase of economic recession.

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