The United States of America, the name in itself is enough for any man on the Earth to know what enigma this specific nation has. As indicated by the United Nations (UN), a country's advancement status is an impression of its "fundamental financial nation conditions." The United States was the most extravagantly created country on Earth in 2019, with an absolute GDP of $21,433.23 billion. India then again, in light of IMF's April 2021 projections is one of the five quickest developing economies of the world whereby the development rate in the year 2020 is 7.97%, and in the year 2021, it expanded to 12.55%.
The US securities exchange has consistently been a riddle for Indian retail financial backers. Probably the greatest organizations on the planet are recorded there. At present, 13 enlisted stock trades work in the United States. The best 3 enlisted Stock Exchanges are The American Stock Exchange (AMEX), The New York Stock Exchange (NYSE), and The National Association of Securities Dealers (NASDAQ). The NYSE is the biggest stock trade on the planet as far as market capitalization. India has 8 National Stock Exchanges and 21 Regional Stock Exchanges; however, the two significant stock exchanges are The National Stock Exchange (NSE) and The Bombay Stock Exchange (BSE).
DETAILED ANALYSIS OF U.S. AND INDIAN STOCK MARKETS
A stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current price levels with past prices to calculate market performance. In the US the three most broadly followed indices are the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. The Dow Jones Industrial Average (DJIA) is one of the most established, most notable, and most habitually used indexes on the planet. It incorporates the supplies of 30 of the biggest and most powerful organizations in the United States. The two conspicuous Indian market indices are Sensex and Nifty. Sensex is the most established market record for values; it incorporates portions of 30 firms recorded on the BSE, which address about 47% of the list's free-float market capitalization.
It can be analyzed that in the last decade both the US and the Indian Stock Market have generated a similar return for their investors. The return for the first five years was particularly very similar for both the Stock markets. US market growing at 12.86% compounded annually and that of Indian Market grew at 12.11%. The compounded annual return for both the markets as generated by DJIA and Sensex in the last decade is 9.75% and 9.70% respectively. The Indian Stock Market has witnessed much more fluctuations as compared to the US Market.
Volatility means risk in the language of the Stock Market. While calculating the volatility for the last 10 years, it can be analyzed that Dow Jones and Sensex volatility has been 3.92% and 5.06% respectively. This indicates that the US market has been less volatile as compared to the Indian Market. Hence, the Indian Stock market has been riskier.
SECTORS PLAYING A KEY ROLE IN THE STOCK MARKETS
By investigating the areas which have the most weight in a record it can decipher that financials rule Indian lists while tech firms rule US Markets. This is fundamentally in light of the fact that the US is very much evolved as far as innovation contrasted with India. FAANG or the Tech Giants alludes to the supplies of five conspicuous American innovation organizations: Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX); and Alphabet (GOOG). These organizations are extremely famous among the customers and add to a consolidated market capitalization of almost $7.1 trillion as of August. 19, 2021. The developments and tech headway purchased by the organizations give an incredible benefit to the US Stock market.
CURRENCY-AN IMPORTANT COMPONENT
The distinction in the currency significantly affects one's portfolio. Thinking about the Indian Rupee, this has seen a reliable decrease against the American Dollar. Here is the whole distinct advantage on the grounds that in India exchanging is done in INR. In this year, the dollar is up by 6% against the rupee. The American Dollar has a significant benefit in putting resources into the US Stock Market. As it appreciates in esteem so does the speculations and one's portfolio.
CONTRAST IN THE WAY OF MAINTAINING DECORUM
The Securities and Exchange Commission (SEC), an independent agency of the United States federal government, regulates the secondary market of the US. In India, SEBI regulated both primary and secondary markets. These agencies are set up to watch over the market and to ensure no malpractices take place and to make sure that all the rules and regulations are followed. The SEA 1934 has specific sections for conferring liability on traders for insider trading and initiation of civil penalties against them. The Act also makes it obligatory for the listed companies to publish all the information regarding the securities and highly restricts any use of manipulative or deceptive means under the Act. The SEBI Act 1992 however speaks directly regarding the prohibition of manipulative and deceptive devices and does not have a separate section for the other practices as mentioned in the SEA 1934.
PANDEMIC-THE ULTIMATE GAME CHANGER OF ALL TIMES
On March 23, 2020, the U.S. Financial exchange hit absolute bottom and saw a violent month due to the Covid episode. This brought about a 30% drop in each of the major indices from their previous rise. After it turned into that the immunizations will be accessible and there was optimism in the country. Henceforth the thing that was surprising was, The Dow Jones, S&P 500, and Nasdaq have soared 76%, 76%, and 95%, respectively, making it beyond a year, one of the most outstanding 365-day stretches since World War II.
Due to the pandemic, the Bombay Stock Exchange saw a drop in the Sensex record to 13.2% on March 23, 2020. It was the most noteworthy single-day fall after the information on the Harshad Mehta Scam, April 28, 1991 (Mandal, 2020). Essentially, Nifty has additionally declined to practically 29% during this period. A few business analysts have considered the effect of COVID‐19 on the Indian securities exchange as a "dark swan occasion," that is, the event of a profoundly unexpected occasion with an incredibly terrible effect. India is in transit of recuperation and Sensex is ready to see the quickest recuperation from an emergency, in the past 30 years.
CONCLUSION
To encapsulate, it can be said that the U.S. market provides better returns and is less risky compared to the Indian Stock Market. The U.S is the most developed country in the world while India is in the developing stage. It will not be entirely wrong to state that the unstable economic growth India is witnessing, it can be said that for the coming 10 years India will not witness the speedy growth as the US. In one of the statements stated by Indian billionaire businessman, Mukesh Ambani "India transformed from an economy of scarcity in 1991 into an economy of sufficiency in 2021. Now, India has to transform itself into an economy of sustainable abundance and equitable prosperity for all by 2051. In India, equity will be at the heart of our collective prosperity,"
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Good article!