Bank Deposit Perform Well
Bank fixed deposit was the best performing asset in India, Morgan Stanley said in a research note, adding that the country is on a path to gradual and uneven recovery. According to the global financial services firm, even as 2015 was a good year for the Indian macro economy, as measured by the four key parameters of GDP growth, inflation, current account balance and fiscal balance, this did not translate into spectacular returns for the stock markets. In sharp contrast to 2014, when equities (BSE 100) gave a 32 per cent return to investors, the returns turned negative this year, down 6.4 per cent. This is despite the fact that at the same time last year, expectations were high for a strong performance for equities in 2015 on hopes of a reform-oriented government and a V-shaped cyclical recovery in the economy. Interestingly, bank fixed deposit was the best performing asset in India, outperforming equities, gold and property.
The global brokerage firm further noted that in the short term, macroeconomic fundamentals may not have a positive correlation with market returns. The year 2015 was good for the Indian macro economy, but this did not translate into spectacular returns for the stock markets.
We would like to note that Purnartha returns actually beat NIFTY throughout the year.