Indian indices at record highs, but underperforms other markets

07 July 2007

In arrangement with Thomas White Global Research

Indian equities gained for the fourth successive week, ahead of the earnings season starting next week. As economic growth remains strong and inflation has eased, market focus would be on corporate margins.

Though the domestic indices touched record highs, India underperformed other emerging markets for the week. While the MSCI Emerging Markets index rallied 4.43 per cent for the week, MSCI India index could manage returns of only 2.56 per cent.

For the year, MSCI India index has returned 19.78 per cent in US dollars as against 22.97 per cent returned by MSCI Emerging Markets Index. Returns on the MSCI India index in rupees continue to lag at 9.46 per cent as the currency remains firm against the US dollar.

However, India fared better than other emerging markets during the last quarter. For the April-June quarter, India returned 20.84 per cent while all Emerging Markets returned 15.05 per cent. Emerging markets in Asia outperformed with returns of 18.49 per cent for the quarter while those in other regions returned 11.33 per cent.