Date: 28th Nov 2021
The Sensex Returns V/S GDP Growth chart
- Chart Notes: 2021SF is 2021 So Far. CY is calendar year. Also a positive ‘High-Low Return’ number indicates that intra-year high was after intra-year low and vice-versa. Data Sources: wikipedia, Bloomberg, Credit Suisse.
- The CY Sensex returns reflect key events – 1999 dot com up; 2000 crash, 2008 crash etc.
- The average CY Sensex return over 20 year period is 18%.
- The High Low Return is the intra CY volatility. The GDP real growth line largely runs similar to Sensex return while being mostly positive and smoothened out. Except 2020.
- The CY Sensex return over 2018-2021SF isn’t very high. It looks like just average returns. The volatility is high with higher highs and lower lows. GDP growth has fallen in 2020 and now looks in recovery mode.
- It does appear that the GDP fall is not reflected in the Sensex returns.
- Sensex returns have been low to average, contrary to public opinion. Volatility has been high.
- A good GDP recovery in CY21-23 can raise Sensex returns to above average levels.
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