Indian Stocks for Future

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Posts Tagged ‘India growth story’

Where the indian stock market is headed?

Posted by sspventure on September 17, 2009

Currently the Indian Stock market is hitting new highs every day. BSE SENSEX is trying to touch 17000 and NSE NIFTY moving towards 5000 marks.


From March 2009 the Indian market has continuously raised and gained around 90% from the March lows. This was pretty much due to the below reasons

1) Increased liquidity in the Overall Global Markets
2) Improving Economic situation of the global economies
3) Majority Congress Government after recent India Elections
4) Better Q12010 results by the Indian corporate

Due to all these reasons above and also the improvement in the rain in India, the Indian markets are roaring to reach the new heights. Now the market players are betting on the good Q2 results from the Indian corporate. If the results come in line with the expectation of the market then definitely we can see further up move of 10 to 20 percents from these levels. And also if the results don’t come as per the market expectations there will be definite down move.

Somehow to me it looks like the market has run beyond its fundamentals and currently the valuations are very expensive. Any major negative news can spoil the market sentiments and drag it down by 10-20% from these levels. Leaders all over the world are taking necessary steps to keep the momentum going. The money pumped by the different governments in the economy is fueling the stock markets. Due to the excess money in the market everybody is trying to cash-in on the increasing markets which in turn accelerating the pace of the index growth.

The worldwide fundamental issues like the unemployment, housing rates, Industrial growth rate, are not improving as the market is expecting it to be. The Indian market has run much beyond the current fundamentals of the market and the overall economic situation in the world. Any bad news from US or china can disturb the sentiments very badly. Different corporate are also trying to cash-in on the improved sentiments of the market. They are coming up with IPOs with stretched valuations, getting funds by QIPs, coming up with the follow-on public offers, rights issues, direct sale of the shares to the Institutional investors etc. India’s biggest private sector player RIL has also sold some treasury shares at an average price of Rs. 2125 accumulating an amount of US $664.

Selling of stocks by the promoters to raise the money is kind of alarming situation and the retail investors need to be very cautious here on. The market is consolidating and moving upwards on any slight positive news from US, or any other part of the world. Also there have been lot of emphasize given on the local growth or domestic growth story for India. It is pretty clear that India as a country has tremendous potential for growth but the markets are running much beyond the fundamentals.

Considering the overall situation it looks like the Indian Market will keep up moving till the Q2 results in hope of better results from the cooperates. But there is major chance of a big correction in the range of 10-20 percent in the very near future. Any bad news from US banks, China bubbles, and Swine flu influence can start the downward movement for the market.


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Why Invest in India?

Posted by sspventure on September 14, 2009

India is currently providing tremendous opportunities for the investors all over the world to participate in the Growth of India. Last two decades had been very important for the developing countries like India and China.

            China has already proved her metal by becoming the manufacturing hub of the world. These two Asian countries are making lot of waves in the investments world by attracting legendary investors for the significant investments.  Giants in different sectors like Automobile, Chemicals, FMCG, Telecommunications, Information Technology, Defence, Infrastructrue, Power etc are entering into India and China via collaborations with the domestic players etc. The investment which I am talking about is the long term investment means for the minimum of 3-5 years. At this stage the Indian stock market is trading at a P/E ratio more than 20 and is almost ready for the significant correction. Any major correction in the range of 10-20 percent will provide decent opportunities for the investors to enter in the quality Indian stocks.

Some of the major reasons why one should invest some portion of his/her portfolio in India are as below

 Stable Government in India

This year India has the general elections in which UPA (United Progressive alliance) led by the Congress Party won the elections by majority as 262 out of total 543 seats.

Dr. Manmohan Singh with Obama

Dr. Manmohan Singh with Obama

India is the largest democratic election in the world and electorate strength is greater than United States and United Kingdom combined. Continuous second term for this government brings in the continuity in the development activity in the nation.

 Thrust on Infrastructure and Power

India is developing and currently far behind the developed countries in terms of Infrastructure and Power generation and utilization. Power demand and supply situation in India has the deficit of around 12% and Indian industrial sector and the urbanization is hungry for the power.

Worli Sea link project

Worli Sea link project

There is also a tremendous scope for the development of roads, free ways, airports, automobiles, utilities, railways, telecommunication, aviation, hospitals, healthcare facilities etc. The Indian growth story is not solely depending on the export of services and products but it is mostly driven by the domestic consumption. This makes India comparatively less dependant on the other economies.

 Huge population with excellent Skills and big middle class market

India is highly diversified country with hundreds of languages and thousands of dialects.Each and every state in this country is striving for development in different spheres of industrialization. Huge English speaking educated pool of young resources is the major contributing factor for the growth of India. This talented pool of decent earning young People form the largest middle class and upper middle class section on the planet and hence are the great market for consumption. This exponentially growing high earning section of people is fueling the domestic demand/supply mismatch and hence driving the capacity expansion in different sectors.

 Excellent Management and Entrepreneurs

Knowledge based India economy is the fertile ground for the entrepreneurs. Young Indians have a dream to become the next Ratan Tata, Narayana Murthy and Dhirubhai Ambani of the corporate world. India has an extraordinary talent pool with virtually limitless potential to become entrepreneurs and excellent managers. People of Indian origin like Indra Nooyi, Vikram Pandit, L.K.Mittal, Sabir Bhatia, Vivek Paul and Sanjay Jha are highly successfully managers in some of the top companies in USA.

Ratan Tata launching Nano

Ratan Tata launching Nano

India is well positioned for the excellent growth in the next couple of years. It provides and excellent opportunities for the investors all over to world to take part in the growth of this country. Any serious growth investor can invest in Indian stocks market on any correction here on. If you are able to grab the Quality stocks/funds at the reasonable price and having a long term horizon for your investment you will surely reap the benefits.

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