Hot Indian Market

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opmtrader

ET members:

I check a number of charts of world markets each day. This is a process I've only started recently. Lately I have been amazed to find that each day I look at the intraday chart of the Bombay India Index (SENSEX (^BSESN)) I see a smooth upward trending slope, each and every day for as long as I can remember.

I've attached a number of charts that show the current state of the Indian market. The market is up over 100% from its May lows. While I know that many markets around the globe have experienced gains this year this market seems especially hot. This market's assent is dwarfing the rise it saw during the tech bubble. Something interesting is going on here.

Click on a handful of the main component stocks here: http://finance.yahoo.com/q/cp?s=^BSESN You will find many of them up 200% + in the past year. What is also telling is that the bulk of these stocks mirror the index in shape, a tell tale sign to me of a real money push into these stocks.

What I am wondering is if anyone has had any experience with Indian stocks, companies, or the country itself. What has the financial press been saying about this market? What is the word on the street there? Has irrational exuberance caught on in the subcontinent? Equally important, had anyone played any Indian ETF or and Indian ADR's recently? The best bet seems to be IFN.

Anything you have to add about India's market or emerging markets in general would be very welcomed here. Thanks.
 

Attachments

You can find what Indian press is saying about market here
http://www.samachar.com/biz/reindex.html
I have positions in IFN, MTE, IBN and HDB and RDY adr currently.
The Indian economy is growing at a rate of 8% this year. Most of the Indian companies have undergone a painful restructuring over last 3-5 days and have a strong balance sheets.
Currently every single large US and world based fin institution is represented in India and are significant investors in the market.
Like any other market it has its share of hype and scandals from time to time. My personal reading of the market is that market is headed for a long term bull market.
 
Quote from opmtrader:

ET members:



What I am wondering is if anyone has had any experience with Indian stocks, companies, or the country itself. What has the financial press been saying about this market? What is the word on the street there? Has irrational exuberance caught on in the subcontinent? Equally important, had anyone played any Indian ETF or and Indian ADR's recently? The best bet seems to be IFN.

More...
PM me if you need any info, I have worked for 12 year at senior management in India and have written for Indian business press extensively.
 
Quote from Dustin:

Anyone know how these trade? Is it all electronic? Does IB have access?
More...
The ADRs trade in USA. The Indian market is electronic but there are several restrictions on foreigners opening acount.
 
easyguru,

It seem like we've found a bona fide expert in you my friend. Thank you for the links and the additional tickers. Can you supply us with any other interesting tickers from the Middle Eastern markets you follow?

I do agree that India may be poised for a very long term bull market if the country continues to grow and develop at a steady clip. It seems that the combination of a somewhat educated populace, burgeoning middle class, the rise of modern cities, and the increased jobs moving in from the rest of the world, could make India a potential juggernaut for the next 20 years. Of course that is merely the impressions that this outsider has gleaned from sound bites and news reports. We all know that those typically tell only half of the story. I am wondering what the flip side to all of this is. I am a fan of famed emerging market investor Jim Rogers. He claims that India will not be the prevailing country from the group of competing developing nations. He notes terrible beauracracy, poor infrastructure, and certain cultural factors as limits to future growth. Of course these are the typical challenges most developing countries face. His choice is mainland China. Their market has not fared as well recently as India's though.

From a trading perspective I am wondering what could signal and end to this run. Is there a possibility of a crash here in the near term? Is there anything pending which could spook the typical Indian investor or foreign investor? Is this run do primarily to Indian nationals catching the investing bug or foreign funds bidding up the stocks? I have quantitative means of determining the crash hazard level and can say from a cursory analysis that the Indian index is at risk. I am just wondering if there is a potential catalyst that could trigger a reversal. You have to have a catalyst. You just can't short something because it has gone up too much.

In any case thank you for helping me educate myself on what seems to be an increasingly important market.
 
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