In the run-up to the 2014 general election, markets had moved up sharply in anticipation of a Narendra Modi government coming to power. But on the cusp of its second anniversary, the Sensex is now a mere 4% higher than where it was two years ago.
That 4% hides the story of two years and two halves.
During the first year of the Modi government, the Sensex was up almost 12%. After that, much of the magic wore off.
In a way, India’s experience is not dissimilar to Japan and Indonesia, two other markets where so-called strongman leaders took charge around the same time.
If anything, their markets have fared worse. As the chart shows, the Sensex is now lower than a year ago.
In all fairness, it has been a tumultuous year with a commodity price meltdown and the problems in China. A lot of investors wanted to cut risks as can be seen from the relative rise in the Dow Jones index.
The Indian markets, like the rest, now march to the beat of a global drummer.