Today's Equity crash is just a beginning of series of systematic pull back of the cheap money fueled by the FIIs. First warning bell rang in May when our currency has started depreciating and for starters(currency most of the time has an inverse co-relation with Equity Index). Divergence was there in the trend coz both Equity and Currency were in upswing. Reason being the USD pulled out of the Indian economy from the debt instruments.
http://www.bloomberg.com/news/2013-0...urrencies.html
Domino effect got confirmed by further news here.
http://economictimes.indiatimes.com/...w/20534118.cms
So clearly our market is being propped up by these strong FIIs and the analyst who were boosting on the earning potential ignored or tried to overlook the money which was already invested by the Carry traders. And results are obvious. We took a hit of approximately 3% even Mr Bernanke suggested that they may wind up their QE by the next year. So its a easy guess that our shares and index will go for a toss if in reality that actually happens.
I'll update this thread for further developments as Equity, Currency and Commodities are deeply interconnected and have deep repercussions. Feel free to add your views and comments.
Some more links are already posted in this thread http://www.traderji.com/metals/87727...tml#post817882
So is our market really worth Investing from here in shares whose value is dependent upon the mercy of borrowed money.
How you consider risk of FIIs money into our system. Do we have any shield to this Systematic risk.
Waiting to hear from you....
http://www.bloomberg.com/news/2013-0...urrencies.html
Domino effect got confirmed by further news here.
http://economictimes.indiatimes.com/...w/20534118.cms
So clearly our market is being propped up by these strong FIIs and the analyst who were boosting on the earning potential ignored or tried to overlook the money which was already invested by the Carry traders. And results are obvious. We took a hit of approximately 3% even Mr Bernanke suggested that they may wind up their QE by the next year. So its a easy guess that our shares and index will go for a toss if in reality that actually happens.
I'll update this thread for further developments as Equity, Currency and Commodities are deeply interconnected and have deep repercussions. Feel free to add your views and comments.
Some more links are already posted in this thread http://www.traderji.com/metals/87727...tml#post817882
So is our market really worth Investing from here in shares whose value is dependent upon the mercy of borrowed money.
How you consider risk of FIIs money into our system. Do we have any shield to this Systematic risk.
Waiting to hear from you....