Indian stock market performance this year compared to Rahul Dravid's batting

With a Test match average of over 50-plus and one-day average of close to 40, Rahul Dravid is considered one of the greatest batters. During his playing days, the Team India coach was also especially adored holding up one end against high-quality bowling attacks on difficult pitches. Indian stock market's performance this year has been similarly compared to Rahul Dravid's batting on a green top against world class swing bowling. 

Indian stock market index Nifty is flat on a year-to-date basis. But if compared against other global markets and other asset classes, Indian stock markets have stood out. 

“Looking at the year to date (YTD) performance in relative terms provides a better picture. US Nasdaq is down more than 30%, Hang Seng is also close to -30%. Same with other major Developed and Emerging markets, most of whom are down over 5-10%. Even debt funds in domestic markets have given about 1-3% returns due to the impact of rising interest rates. Gold and Silver have delivered around -2% to -5% returns,” said Vivek Goel, Joint Managing Director, Tailwind Financial Services.

“Now, compared with these returns, looking at a 1% Nifty performance does not look so bad right? What’s more? While we are aware that the mid cap segment is more volatile, in the same period its performance has been 2%. This is the kind of resilience that Indian markets have exhibited in this year which has seen the Russia-Ukraine war, large sanctions affecting energy and commodity prices, inflation worries leading US Fed to completely flip towards a historic rate hike cycle which in turn sparked worries about recession and China’s lockdown policy to limit Covid spread leading to supply side pressures globally.”

Mr Goel takes cricket's analogy to describe Nifty's performance this year: “Think of it in terms of cricket. On a green top with world class swing bowling, we revered Dravid for his defence. In a way the same parallel can be drawn for how Indian markets have performed this year. As investors, we would love for markets to grow linearly by providing the targeted 12-15% returns annually, but the truth is that bulk of this annualised return is created in a bull market and an important foundation prior to that is minimising accidents in the portfolio in a volatile environment.”

His advice for investors: “Investors would do well to keep this in mind as they sit to review their portfolio and its performance. It would be important to consider relative performance rather than simply looking at a scheme’s absolute performance while making a decision. At the same time, like we clean our houses in Diwali, a similar clean up would be a good idea for our portfolios as well. With India’s position strengthening globally, a well-positioned portfolio would be able to reap the benefits from the next phase of the market cycle.”