Nifty
companies return more in dollar terms since October.
The Nifty’s returns in dollar terms have continued to edge ahead of
those pegged to the local currency, helping India emerge as the second-best
performer among the world’s top 15 capital markets in the past two months.
Data compiled by ETIG showed that dollar returns at about 11
per cent exceeded rupee-denominated returns since October 9 last year. The
rupee has gained 7.88 per cent against the US currency since that date.
At the vanguard of the gains
in the broader indices are stocks of large-sized companies known for their high
cash-flows, dominant market share, and attractive return ratios. ICICI Bank (NSE -0.61%) , Bajaj Finance , Axis Bank (NSE -1.27%) ,
Hindustan Unilever (NSE 0.55%) , HDFC , and Larsen & Toubro have paced the gains in returns. The rupee’s climb against the US
monetary unit has enhanced the performance of these stocks in dollar terms
since October.
In the past one year, the Nifty has nominally gained 2.05 per cent
,but fallen 5.75 per cent in dollar terms
. The rupee had hit a low of 74.4 against the dollar in October before the
rebound helped the local unit gain 7.88 per cent.The rupee had hit a low of 74.4 against the dollar in October before the rebound helped the local unit gain 7.88% to date.
Tracking the performance of
the Nifty in dollar terms is one of the crucial barometers for foreign
investors as it helps them gauge the attractiveness of Indian equities
vis-a-vis other emerging markets. Foreign investors own 45 per cent of the
Nifty's free float, underscoring the importance of tracking the performance of
the Nifty in dollar terms. The robust stock returns of 9-32 per cent
between October 9 and Wednesday in the index bellwethers show that foreign investors
have gained considerably from their dollar investments in India. Separately, the dollar returns of the Indian and
Indonesian markets have been robust since October 9 last year. Dollar returns
from the Indian markets were 10.8 per cent since October 9. Among the emerging
markets, dollar returns from Indonesia have been the highest at 16.6 per cent.
By contrast, equities in France, Germany, the US, the UK, and Japan are down in
the range of 7-10 per cent since October last year .
In the past one year, Bajaj Finance has returned the highest in rupee
terms, at 40.6 per cent. In dollar terms, Bajaj Finance yielded 27 per cent
returns in that period. But since October 9, Bajaj Finance has returned 29.3
per cent in dollar terms and 22.5 per cent in rupee terms.
