Don't look now, but India's stock market is on fire. Ā At its close today, India's Sensex was up 6.83% over the last three trading days, leaving it up 12.76% in 2014. Ā The Sensex is now up 192.5% from its Financial Crisis lows made in March 2009. Ā A few days ago before India's massive run higher, the S&P 500 was still outperforming the Sensex over this 5+ year time frame. Ā Not anymore. Ā As shown in the chart below, the Sensex is now up 12 percentage points more than the S&P 500 since March 9th, 2009.
Below is a chart showing the performance spread since March 9th, 2009 of the two countries shown above. Ā When the line is in positive territory, it means India was outperforming the US at that point in time. Ā As shown, after jumping high out of the gate in the early days of the bull market back in 2009 and 2010, India has struggled against the US since 2011. Ā At one point in late 2010, India was outperforming the US by 80 percentage points off the March 2009 lows. Ā By early 2012, those gains had been completely erased, and for much of 2013, the US was outperforming India. Ā 2014 has been a different story, though, as Indian shares have surged while the US has flat-lined. Ā The move back into positive territory in terms of outperformance has actually broken the downtrend line highlighted in the chart. Ā Does this pave the way for a longer-term period of outperformance for emerging markets like India? Ā Time will tell.
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