The Crash( 17.5.2006) and FII activities since then
- Thread starter pkjha30
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Hi
So finally sensex has crossed 12000 mark and is now at 12274 up form its lowest point slightly less than 9000 but still low from its highest point 12671.
Similarly nifty is at 3553 up from 2663 but still lower from its highest point 3717.
It has indeed been a roller coaster ride for Indian stock markets as well as other stock markets world over. This phenomenon was not limited to India or emerging markets alone. Investors world over have suffered and certainly they are wary of any upmove that market now makes.
I was reading through various posts in this thread and other threads. The fire has been as intense as ever among members. It is a great place to be in.
So just I want to recapitulate on the original theme of FIIs influencing our market.
They have been net investor in the cash market
------buy-----sell----- net in rupees crs
for the month of september -----21810.8--- 17867.6 ---3942.9
Total for 2006 331298.5--- 309966.3--- 21332.2
Grand Total till September 21, 2006 ----1185115.5--- 988341.1 ---196774.5
Mutual Funds have been net buyers for August and September though they were net seller for Jun and JUL
June 2006.-- 7843.52--- 9820.47---(-1976.95)
July 2006.--7552.18---7633.89---(-81.71 )
August 2006--8851.58---8425.14--- 426.44
September 2006 (as on 20th)---5942.28 ---5665.70---276.58
These actions indicate there is again liquidity in the market and it is in the consolidating mode.
The graph for nifty shows general uptrend is intact though it was severely impacted by the crash.The graph for Sensex is on similar line.
Presently, sensex is in the upper range of 11500-12500.It is quitely reflecting the confidence of the investors and as always retail investors would be the last to enter not forgetting the recent crash.
FIIs have done quite a bit of churning in their stock holdings and the same is reflected in the movement of Sensex and Midcap stocks. Though sensex is nearing its all time peak, not all stocks have turned favourites and many achievers are still struggling to gain at least half the price from the peak.Secondly, individual stock charts which I happened to scan showed familiar uptrend but many of them were at half the mark and consolidating but not near their high points.
This brings up the cardinal principle of investment: to invest in stocks , not based on news and views but on technicals and Fundamentals of the stcoks, the price-volume actions for the relevent period and grwoth prospects , PE PB or BV ratio or many other parameters. However one would be tempted to say that Many stocks which appear fundamentally sound do not have fantastic prices. This may happen due to various other factors such as faith in management, propensity of promoters to share wealth with other shareholders by way of divident, bonuses, also faith of stock holders in future growth of the company.( there is an interesting aside:- when chips are down for stocks , people talk of divident and when it is up they talk of appreciation in stock price.) also sectors which are hot and those which are not. Results always have huge impact on investors confidence. Result session always acts as pointers to the shape of things to come. The genral economic conditions provide support base for the markets to move up or down.
In the light of above, I feel that since we are growing at the rate of 8-9 % and are expected to grow at that rate , market should be able to post positive results for key sectors and indices would certainly reflect this. On day to day basis, markets will be influenced by world markets as well but on a larger time frame India is in a different growth trajectory, so market is likely to surpass other indices. Volatality is the hall mark of emerging markets , more so with India, but it has more to do with FIIs and , Hedge funds and Mutual funds than the investors. This is where we need to be cautious and alert all the time and monitor portfolios as we would guard our cash .
What FIIs would do in future? This a big question. Nomura or other of such ilks have their own strategy. They found Indian Market worth 7500(sensex) but it never touched that. Mark Faber is quitely slipped away to unknown destination. Many FIIs also burnt their fingers in the crash but they are able to withstand due to their sheer size. Reatil investors and traders are not in a position to do that. Moreover regulatory aspects of Indian Economy is still weak and retail investors are open to sharks of Indian Finacial Markets which does not exclude FIIs. The stories we heard from many Forum members and in perticular from Ganesh is symptomatic of such lack of regulation and also clarity of steps required to be taken. Most of the volatality of Indian Market is due to this factor rather than any weakness in the economy.After the crash of 1929 American Finacial Markets are regulated so as to reduce volatality and unbriddled opportunism by unscupulous persons or institutions. Indain Regulators have not shown that type of regards for Public opinion or any sensibilities to fix the system where it went wrong.
In absense of such response Market is expected to remain treacherous for retail investors. But those who invested or traded prudently would be amply rewarded. This is the single most yielding instrument if invested on a long term and in proper stocks. It beats the inflation by a handsome margin.
One interesting observation I had is that during crash and uncertainty, newspapers and tipesters stopped many watched columns such as technical analysis, price action , stocks which are likely to move up etc. After a long time one day I saw such columns appearing again in the prominent financial daily(BL). During peiod of extreme duress, lack of faith on technical aspect was surprising, especially from those who profess by it. This shows lack of basic understanding of the nature of TA. Once we understand the presumptions working behind it we would be in a better position to appreciate it.TA assumes randomeness of market actions of participation. When this randomness is gone(FIIs acting in concert world over) the conclusions would not be valid.This aspect also needs to be factored into conclusion on a broader scale. Many do it and are saved but due to lack of transperancy and availability of accurate informations, small traders and retail investors suffer huge losses.
The way out of this logjam is to adhere to strick discipline of investment and trade. Proper stoplosses are a must. This point has been discussed in detail and how it has caused losses by SL getting triggered and people forced to sell at loss due to whiplash. This must be studied in detail and SL should be in keeping with the Market conditions.
Laslty, I would say that GFH factor must be understood and tamed if not erased altogether.One should be willing to cut losses and protect the profit.There is always another day to invest and profit. Market is a place where one participated individually and gets affected collectively. It is no place for emotional swings . Trying to take revenge from market is something which most of us do unconciously. We are only under illusion. Symptoms are like trying to make profit from the stcoks where one suffered losses, trying to over trade when volatality is at the extreme.One should follow one's own style rather than abandon it and drift in the violent market.
Well its long and now I should close. If you believe in the economic growth of the country(it will always swing, no India shining factor or Mera Bharat Mahaan...) then believe me, sensex is going to reflect it adequately. It will certainly scale higher highs and higher lows.May be Jun was the beginning of a new primary uptrend in the long term secular uptrend of the Market. In any case 15000 is not far off. DOW or No DOW.
Pankaj
I would like to thank all members for their warm support extended to each othe during last few months. Czar, mohamed,agilent, Bin Haid, rhienu, munchi, rajesh, amitt29,judemit, kuldeep, srini, Anupama, ashish, vinsu, trader123 , jdm,ravi1967 and many others who posted here.
I would also like to place on records, encouragements I received from SAINT as ever, AMITBE(miss you in the forum so much), dear murthygaru, cooltetra(wonderful softwares), satya(who is awlays investing in Bulls) and other senior members.
Thank You all.
So finally sensex has crossed 12000 mark and is now at 12274 up form its lowest point slightly less than 9000 but still low from its highest point 12671.
Similarly nifty is at 3553 up from 2663 but still lower from its highest point 3717.
It has indeed been a roller coaster ride for Indian stock markets as well as other stock markets world over. This phenomenon was not limited to India or emerging markets alone. Investors world over have suffered and certainly they are wary of any upmove that market now makes.
I was reading through various posts in this thread and other threads. The fire has been as intense as ever among members. It is a great place to be in.
So just I want to recapitulate on the original theme of FIIs influencing our market.
They have been net investor in the cash market
------buy-----sell----- net in rupees crs
for the month of september -----21810.8--- 17867.6 ---3942.9
Total for 2006 331298.5--- 309966.3--- 21332.2
Grand Total till September 21, 2006 ----1185115.5--- 988341.1 ---196774.5
Mutual Funds have been net buyers for August and September though they were net seller for Jun and JUL
June 2006.-- 7843.52--- 9820.47---(-1976.95)
July 2006.--7552.18---7633.89---(-81.71 )
August 2006--8851.58---8425.14--- 426.44
September 2006 (as on 20th)---5942.28 ---5665.70---276.58
These actions indicate there is again liquidity in the market and it is in the consolidating mode.
The graph for nifty shows general uptrend is intact though it was severely impacted by the crash.The graph for Sensex is on similar line.
Presently, sensex is in the upper range of 11500-12500.It is quitely reflecting the confidence of the investors and as always retail investors would be the last to enter not forgetting the recent crash.
FIIs have done quite a bit of churning in their stock holdings and the same is reflected in the movement of Sensex and Midcap stocks. Though sensex is nearing its all time peak, not all stocks have turned favourites and many achievers are still struggling to gain at least half the price from the peak.Secondly, individual stock charts which I happened to scan showed familiar uptrend but many of them were at half the mark and consolidating but not near their high points.
This brings up the cardinal principle of investment: to invest in stocks , not based on news and views but on technicals and Fundamentals of the stcoks, the price-volume actions for the relevent period and grwoth prospects , PE PB or BV ratio or many other parameters. However one would be tempted to say that Many stocks which appear fundamentally sound do not have fantastic prices. This may happen due to various other factors such as faith in management, propensity of promoters to share wealth with other shareholders by way of divident, bonuses, also faith of stock holders in future growth of the company.( there is an interesting aside:- when chips are down for stocks , people talk of divident and when it is up they talk of appreciation in stock price.) also sectors which are hot and those which are not. Results always have huge impact on investors confidence. Result session always acts as pointers to the shape of things to come. The genral economic conditions provide support base for the markets to move up or down.
In the light of above, I feel that since we are growing at the rate of 8-9 % and are expected to grow at that rate , market should be able to post positive results for key sectors and indices would certainly reflect this. On day to day basis, markets will be influenced by world markets as well but on a larger time frame India is in a different growth trajectory, so market is likely to surpass other indices. Volatality is the hall mark of emerging markets , more so with India, but it has more to do with FIIs and , Hedge funds and Mutual funds than the investors. This is where we need to be cautious and alert all the time and monitor portfolios as we would guard our cash .
What FIIs would do in future? This a big question. Nomura or other of such ilks have their own strategy. They found Indian Market worth 7500(sensex) but it never touched that. Mark Faber is quitely slipped away to unknown destination. Many FIIs also burnt their fingers in the crash but they are able to withstand due to their sheer size. Reatil investors and traders are not in a position to do that. Moreover regulatory aspects of Indian Economy is still weak and retail investors are open to sharks of Indian Finacial Markets which does not exclude FIIs. The stories we heard from many Forum members and in perticular from Ganesh is symptomatic of such lack of regulation and also clarity of steps required to be taken. Most of the volatality of Indian Market is due to this factor rather than any weakness in the economy.After the crash of 1929 American Finacial Markets are regulated so as to reduce volatality and unbriddled opportunism by unscupulous persons or institutions. Indain Regulators have not shown that type of regards for Public opinion or any sensibilities to fix the system where it went wrong.
In absense of such response Market is expected to remain treacherous for retail investors. But those who invested or traded prudently would be amply rewarded. This is the single most yielding instrument if invested on a long term and in proper stocks. It beats the inflation by a handsome margin.
One interesting observation I had is that during crash and uncertainty, newspapers and tipesters stopped many watched columns such as technical analysis, price action , stocks which are likely to move up etc. After a long time one day I saw such columns appearing again in the prominent financial daily(BL). During peiod of extreme duress, lack of faith on technical aspect was surprising, especially from those who profess by it. This shows lack of basic understanding of the nature of TA. Once we understand the presumptions working behind it we would be in a better position to appreciate it.TA assumes randomeness of market actions of participation. When this randomness is gone(FIIs acting in concert world over) the conclusions would not be valid.This aspect also needs to be factored into conclusion on a broader scale. Many do it and are saved but due to lack of transperancy and availability of accurate informations, small traders and retail investors suffer huge losses.
The way out of this logjam is to adhere to strick discipline of investment and trade. Proper stoplosses are a must. This point has been discussed in detail and how it has caused losses by SL getting triggered and people forced to sell at loss due to whiplash. This must be studied in detail and SL should be in keeping with the Market conditions.
Laslty, I would say that GFH factor must be understood and tamed if not erased altogether.One should be willing to cut losses and protect the profit.There is always another day to invest and profit. Market is a place where one participated individually and gets affected collectively. It is no place for emotional swings . Trying to take revenge from market is something which most of us do unconciously. We are only under illusion. Symptoms are like trying to make profit from the stcoks where one suffered losses, trying to over trade when volatality is at the extreme.One should follow one's own style rather than abandon it and drift in the violent market.
Well its long and now I should close. If you believe in the economic growth of the country(it will always swing, no India shining factor or Mera Bharat Mahaan...) then believe me, sensex is going to reflect it adequately. It will certainly scale higher highs and higher lows.May be Jun was the beginning of a new primary uptrend in the long term secular uptrend of the Market. In any case 15000 is not far off. DOW or No DOW.
Pankaj
I would like to thank all members for their warm support extended to each othe during last few months. Czar, mohamed,agilent, Bin Haid, rhienu, munchi, rajesh, amitt29,judemit, kuldeep, srini, Anupama, ashish, vinsu, trader123 , jdm,ravi1967 and many others who posted here.
I would also like to place on records, encouragements I received from SAINT as ever
, AMITBE(miss you in the forum so much), dear murthygaru, cooltetra(wonderful softwares), satya(who is awlays investing in Bulls) and other senior members.Thank You all.
Last edited:
Hi
I would also like to place on records, encouragements I received from SAINT as ever, AMITBE(miss you in the forum so much), dear murthygaru, cooltetra(wonderful softwares), satya(who is awlays investing in Bulls) and other senior members.
Thank You all.
I would also like to place on records, encouragements I received from SAINT as ever
, AMITBE(miss you in the forum so much), dear murthygaru, cooltetra(wonderful softwares), satya(who is awlays investing in Bulls) and other senior members.Thank You all.
Nice to see you back, this thread need you very badly and its one of my favourite one. Looking forward to many more posts from you, Saint, Amitbe and all other seniors
Thanks,
Jude
Nice to see again dada. i was missing ur mails from long time. thanks for sending ur views about the market.
Ahmed
i was missing ur mails from long time. thanks for sending ur views about the market.Ahmed
I am really thankful to you for posting in the thread and letting others know of FII activities. I am only worried about Baron the Czar of Bear Market
. If we are not warned in time next time by him then we have to catch him in his den. But it seems market fell badly and shook the dust and is moving on. A big question mark on its resilience??But I feel sad for those who suffered.
Pankaj
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| Thread starter | Similar threads | Forum | Replies | Date |
|---|---|---|---|---|
| T | intraday trading(31/01/2006) | Equities | 21 |