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
All major global equities have given spectacular performance over the last year. As can be seen in the chart above, every major market has given returns in excess of 20 per cent over the last year. However returns over a more medium term (3-year) basis are still in the middle to low single digits implying there is room to run. The exception here of course is the S&P500 which has done well on all time frames. Another point of note is how much the broader emerging market index is outperforming the Indian markets.
The 10 year G-sec yield has been steadily moving higher toward 7 per cent. This probably reflects both global and local trends. On the global front, there is continuing indications of monetary tightening. In addition, global growth has started to pick up and there has been a surge in commodity prices creating expectations of a further rise in rates. On the local front, inflation is picking up and there are indications that the government may find it difficult to maintain its fiscal deficit targets. All these factors are probably weighing on the debt markets, leading to a rise in rates.
Gold 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. At the end of October, oil started to break out of this range and has stayed above it through November. Because of our large dependance on oil imports, this is hugely concerning on the fiscal front and we will have to keep a close eye on how it affects the macros.
The Rupee has generally depreciated against most currencies in November.
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.