Key Points
A clear mandate favouring the BJP in the Hindi region has ignited an alluring gap-up rally, yielding a notable 3.5% WoW return in the broader market..
After a period of underperformance in the past 1-2 months, India has now positioned itself as an attractive investment by outperforming the global market..
MSCI 1-months return is 8.0% compared to MSCI Worlds 5.2%, 1Yr is 12% vs 13.8%, respectively..
This downward trend in yields is anticipated to persist in the short to medium term, propelled by expectations of easing inflation, geopolitical risks, and an impending economic slowdown. ..
And even if the US yield drops from current 4.18% to 3.5% in Dec 2024, it is still above the long-term average, which does not support the current valuation to sustain. forward P/E of the US is at 21x compared to the long-term average of 18x..
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