High Correlation US S&P500 and Nifty 50

25 thg 2

Last 5 years if one adjusts for covid related correction. US and Indian Markets have given phenomenal returns. Looking at the 5-year chart, the correlation between the markets looks quite high. While US markets was a leading indicator in the beginning. but Nifty later on started giving leading indicator. One can argue that Nifty return is in INR while SPX return is in USD. If one looks at the USDINR exchange rate the CAGR would be around 3% in last 5 years.

While market surely looks heated up .. SPX supported by FAANG and now NVIDIA the rally is very concentrated... while NIFTY has seen sector rotation and broader participation across stocks and industries. The steam to rally another 10% to 15% is still there but risk reward is not going in Favour of being long. One should start trimming position and give away last 5 to 10% gain and focus on saving capital.

2 thg 6

Ghi chú

Gap has narrowed down. looks like when the cross over happens then we may get a good indicator.