5 charts that tell interesting stories on markets and investing.
1) Business Resumption in India:
The above chart shows that businesses in India are now operating at 70% of pre-Covid level. The activity level had fallen to 45% in April, 20. Indian economy is showing good progress. Hopefully, business resumption Index should touch 100 in next 1-2 quarters.
2) Time Travel to Past for Indian Equity
Indian Equity Market is having a good rally since 24th March 2020. Despite this rally, the current Nifty is still at 2018 level, Nifty Mid Cap is at 2016 level and Nifty Small Cap is at 2014 level.
There is a lot of ground to be covered by Indian Equity. Its time to stay invested in Indian Equity for long term and participate in the expected upside.
3) World Equity Market Valuation
The above chart shows Warren Buffett Valuation Indicator – Market Cap to GDP Ratio for major world economies. For India, the ratio is at 69 which was at 92 a year ago and 3 years back it was at 134. The long term average of Market Cap to GDP Ratio for India is ~70. So it can be said that Indian equity market is fairly valued.
The chart also shows that valuation for US market is stretched and China is at reasonable valuation.
4) Impact of Dollar Weakening:
US Dollar has been weakening against global currencies lately because of balance sheet expansion by US Fed. US has been printing dollars to support fiscal and monetary stimulus. The US Dollar may continue to weaken if US continues with extended fiscal stimulus and may strengthen in case of recovery of economy.
The above chart shows the impact of US Dollar on different assets. When US Dollar is down then Emerging Markets and Gold get maximum benefit.
5) Covid Vaccine Status
The above chart shows the status of Covid vaccine globally. Vaccine of Astra Zeneca/ Oxford University is in Phase III and closest to approval. Chinese vaccines are also in an advanced stage. The Indian vaccines are in pre-clinical testing.