Don't look now, but India's stock market is on fire. At its close today, India's Sensex was up 6.83% over the last three trading days, leaving it up 12.76% in 2014. The Sensex is now up 192.5% from its Financial Crisis lows made in March 2009. 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. Not anymore. 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. When the line is in positive territory, it means India was outperforming the US at that point in time. 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. At one point in late 2010, India was outperforming the US by 80 percentage points off the March 2009 lows. By early 2012, those gains had been completely erased, and for much of 2013, the US was outperforming India. 2014 has been a different story, though, as Indian shares have surged while the US has flat-lined. The move back into positive territory in terms of outperformance has actually broken the downtrend line highlighted in the chart. Does this pave the way for a longer-term period of outperformance for emerging markets like India? Time will tell.
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