by Bespoke Investment Group
Throughout the mid-2000s bull market as well as the 2007-2009 bear, the stock markets in the US and India traded mostly in the same direction (although India outperformed on the upside and underperformed on the downside). But while US markets have been breaking out to new highs on a daily basis recently, India's stocks have been going in the complete opposite direction. This rare divergence can be seen in the first chart below that shows the performance of the S&P 500 and India's Sensex since last November. As shown, the S&P 500 is up 11.36% over this period, while India's Sensex is down 12.8%. If we look back to the start of the global bull market on March 9th, 2009, India's Sensex is still beating the S&P 500 (114% vs. 95%), but the spread has come in significantly. So while things here have been all fine and dandy for the past three months, investors in India are no doubt on edge.
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