3 charts that sum up Indian equities in 2014

1. An “exuberant” 2014

  • Both key benchmark indices up by 30%
  • December so far has seen the only significant correction in 2014

2. A “can’t go wrong” 2014

  • Every sub-index provided positive returns, some more than others with returns ranging between 10% and 70%
  • MetalsOil & GasITFMCG and Power under-performed the broader index
  • Small capsConsumer Durables, Mid caps, Auto Capital Goods offered 50%+ returns

3. An “Expectations ahead of Earnings” 2014

  • Indian markets currently trade just above 21x earnings (For every ₹1 in earnings, you pay ₹21)
  • Unless earnings show significant growth in the next quarter or two, historical data over 15 years suggests you’re more likely to lose than gain by buying at these valuations

An exciting 2015 is in store! Here’s wishing you a Happy New Year of Calm Investing.

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