The US benchmark Dow Jones slipped below its pre-pandemic high on Monday as investors continue to dump equities due to rising bond yields, but the Sensex is still 36 percent higher than its January 2020 high, a report by Business Standard stated.
As per the report, on Monday, the US benchmark ended 1 percent lower than its pre-pandemic closing high and over 20 percent lower than its record high hit in January this year, pushing it into the bear market territory.
However, Indian markets remain firmly in the bull phase — both in local currency and in constant currency terms. It is still up nearly 36.2 percent from its pre-pandemic closing high, highlighted BS. Besides, the Indian equity market is still nearly 11 percent higher than its June low unlike other major global equity markets, it noted.
The Sensex is up 22.1 percent in US dollar terms from its pre-pandemic high of $578 made at the end of December 2019.
This has widened the performance gap between the Indian and global markets, stated the market daily.
Analysts fear collateral damage to the Indian equity market if the sell-off in the global market gets longer — and deeper, it noted.
“The Indian equity market has been a global outlier since its June lows and remains relatively firm in spite of global sell-off. However, if the sell-off in the global market sustains, we will see a further decline in stock prices in India," says Shailendra Kumar, chief investment officer, Narnolia Securities.
The global sell-off, however, has begun to have a rub-off effect on some segments of the Indian equity market, said BS. After the recent correction, nearly a fifth of the BSE 500 index stocks are now trading at a share price below January 2020 levels, it pointed out. The decline has so far been restricted to mid- and small-cap stocks in sectors like banking, finance, insurance, construction and infrastructure, and oil and gas, added the report.