India stocks turn negative for FIIs; China still giving gains
June, 22nd 2008
Continuing bear-hug on bourses has made Indian stocks a loss-making investment for overseas investors, even though other three BRIC markets -- China, Russia and Brazil are still giving them positive returns.
A plunge of close to 1,200 points in the benchmark Sensex in past three trading sessions, which came on top of a loss of over 5,000 points in about five months, coupled with recent depreciation in Indian currency, has pulled the dollar return from the US stocks into negative territory.
While the stock market benchmark Sensex takes into account rupee value of share prices of its 30 constituents, the Bombay Stock Exchange also has a Dollex-30 index that reflects the growth in market value of these companies in dollar terms.
While the one-year return from Indian stocks, as per the Sensex, is just holding onto the positive terrain at 0.5 per cent, the same in dollar terms has already dipped into the red with the Dollex-30 plunging by 4.7 per cent in past one year.
Besides, the Dollex-30 hit to its 52-week low on Friday at 2,774.1 points, while the Sensex is still managing a gain of about 800 points over its one-year low of 13,779.88 points hit on August 17 last year.
However, loss in past one month is almost identical for both indices -- Sensex and Dollex-30 -- at about 15 per cent.
As per another measure of returns from various stock markets across the world for foreign investors -- the MSCI Barra indices, Indian stocks are the only one giving a one-year negative return among the four BRIC countries.
While Brazil tops the list among all the emerging markets across the world with a one-year return of about 46 per cent, Russia stocks are up by nearly 27.5 per cent and return is still in positive at 2.6 per cent in China.
In comparison, the MSCI Index for India has dipped by 4.78 per cent in the past one year.
Beyond BRIC countries, MSCI indices for Morocco, Jordan, Czech Republic, Egypt, Israel, Peru, Argentina, Indonesia, Colombia, Thailand and Chile have also given positive one-year returns.
Those sitting in the negative territory among the emerging markets include Taiwan, Poland, Mexico, Hungary, Korea, Sri Lanka, Pakistan and Philippines.
However, Indian stocks are faring better than a number of developed markets including the US, UK, Germany and Japan.
Among developed markets, MSCI indices for only four -- Canada, Norway, Denmark and Hong Kong -- have given positive one-year returns, with that for first three ranging between 10-13 per cent and Hong Kong seeing a gain of 4.8 per cent.
Ireland has seen biggest one-year fall among developed markets with a loss of 38.5 per cent, followed by New Zealand, Belgium, Portugal, Sweden, Italy, UK and Australia.
The US and UK stocks have lost about 12 per cent and 17 per cent respectively, while Japan is also down by over 12 per cent.