We look at returns of various asset classes such as equity, debt, gold, crude oil and the Indian rupee in our latest monthly market summary.
We use data for these charts from Investing.com
Equities returns across the globe are now starting to show signs of moderation. After many months of continuously moving up, the Sensex has corrected in August on the back of heavy FII selling. Similarly the returns on the S&P 500 and other developed markets have shown a moderate fall. However, as can be seen above, all the indices continue to give double digit returns in the last year. Both the Sensex as well S&P 500 also continue to outperform their peers on a long term basis.
The 10 year G-sec yield has been steadily moving lower from almost 7 per cent in April to roughly 6.5 per cent at the end of July. It has remained roughly in that range throughout August. It will be interesting to see how interest rates play out over the next few months given the fact that CPI and WPI are expected to move up, but at the same time the India GDP number are very sluggish.
Gold has seen a slight uptrend in August, however the commodity continues to trade in the 1200-1400 dollars per ounce range. A strong move of gold outside of this range would give a better indication of its long term trend.
Oil has traded roughly in the 50-55 dollars per barrel range since the beginning of the year. The commodity fell below 50 in April, and has stayed around that level since then. Because of our large dependance on oil imports, it is hugely beneficial if oil continues to remain in this range or even corrects to lower levels. It must be noted also that the strongly appreciating rupee is certainly helping our fiscal deficits.
Most of the Indian currency pairs were roughly stable in August.
Rishad is the founder of Kairos Capital. He started his career with Standard Chartered Wealth Management and has extensive experience in markets, particularly in terms of mutual funds and stocks.