Experts see more market hiccups in near term
Market observers say despite the recovery, it is too early to say if the issue has been blown over.
By TNN |
MUMBAI: ADRs of several Indian companies were up in early trades. In distant markets, there were trades of another kind. Sensing that SEBI will go ahead with the PN curbs, there was active trading of PNs. Investors who were overexposed pared their positions.
And as is usually case whenever there is a sharp downtrend, retail investors in the local market exited their long positions at the first signs of recovery, according to broking circles.
Elsewhere in Asia, Japanese stocks wobbled, mainly because quite a few investors in that country have exposure to Indian equities by way of yen-carry trades (where you borrow in low-cost yen and invest in high-yielding emerging market equities). South Korean shares fell 1% and Taiwanese shares were marginally down, but other markets were largely unruffled.
Market observers say despite the recovery, it is too early to say if the issue has been blown over. “There might be slight hiccups in the near term. However, this issue will settle down slowly and money will find its way in,” says Sage Capital Advisors MD Manish Kanchan.
“Not many can afford to stay away from the India story and they will find a way to enter the market. Maybe, we will witness the launch of many new India-dedicated funds. Serious players will still come to India,” he added.
On the role played by insurance companies, HDFC Standard Life Insurance MD Deepak M Satwalekar said, “Insurance companies have become a counter-balancing stabilising factor to FIIs. We do not trade in and trade out, because insurance companies are long-term players. It is estimated that as on March 31, 2007, insurance companies brought Rs 1, 50,000 crore into the markets.”
Secondline shares were hit harder by the selling pressure. Both the BSE-100 and BSE-200 shares fell over 2%. In sectoral trends, banking and real estate shares fared the worst with the BSE indices, for the respective sectors, falling around 4%. IT shares held ground as investors are betting that the Sebi proposals will check dollar inflows into the country and weaken the rupee in the process.
Aviva India associate director (fund management) Jyoti Vaswani said, “We use corrections or dips such as these to buy aggressively as insurance companies have a steady flow of money. We believe that India has a good growth story and such corrections will not really change the fundamentals of the Indian economy. Our preferred sectors are infrastructure companies and the domestic consumption plays.”
And as is usually case whenever there is a sharp downtrend, retail investors in the local market exited their long positions at the first signs of recovery, according to broking circles.
Elsewhere in Asia, Japanese stocks wobbled, mainly because quite a few investors in that country have exposure to Indian equities by way of yen-carry trades (where you borrow in low-cost yen and invest in high-yielding emerging market equities). South Korean shares fell 1% and Taiwanese shares were marginally down, but other markets were largely unruffled.
Market observers say despite the recovery, it is too early to say if the issue has been blown over. “There might be slight hiccups in the near term. However, this issue will settle down slowly and money will find its way in,” says Sage Capital Advisors MD Manish Kanchan.
“Not many can afford to stay away from the India story and they will find a way to enter the market. Maybe, we will witness the launch of many new India-dedicated funds. Serious players will still come to India,” he added.
On the role played by insurance companies, HDFC Standard Life Insurance MD Deepak M Satwalekar said, “Insurance companies have become a counter-balancing stabilising factor to FIIs. We do not trade in and trade out, because insurance companies are long-term players. It is estimated that as on March 31, 2007, insurance companies brought Rs 1, 50,000 crore into the markets.”
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Secondline shares were hit harder by the selling pressure. Both the BSE-100 and BSE-200 shares fell over 2%. In sectoral trends, banking and real estate shares fared the worst with the BSE indices, for the respective sectors, falling around 4%. IT shares held ground as investors are betting that the Sebi proposals will check dollar inflows into the country and weaken the rupee in the process.
Aviva India associate director (fund management) Jyoti Vaswani said, “We use corrections or dips such as these to buy aggressively as insurance companies have a steady flow of money. We believe that India has a good growth story and such corrections will not really change the fundamentals of the Indian economy. Our preferred sectors are infrastructure companies and the domestic consumption plays.”
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