Nifty makes FLASH LOW of 5195.....5170 protected !!!
Markets tumbled upto 600 points intraday on news of changes in tax agreement treaty with Mauritius, source of over 40% for India's total FDI. Nifty made intra low of 5195. However, our level of 5170 was not breached. So our longs still stand. The markets are extremely oversold and a bounceback of atleast 200 points in nifty can be possible.
Several positives have started emerging for the Indian economy in this fall. Lets take a look at the reasons as to why the markets may rally.
1. Inflation has been the biggest concern for the Indian markets. With Crude coming off over 20% from its highs it will provide the much needed relief to our markets.
Every 1$/bbl change in the price of crude affects our trade deficit by US $800mn and our gross under recoveries by US $700mn. So crude oil prices coming off is a big positive.
2. Commodity prices have come off and started to cool off with fears of lower demand for them due to a lower than expected global growth esp US and Europe.
3. Better than average monsoon will improve investor sentiment and cool off food prices (atleast temporarily) and bring down inflation.
4. Our markets have underperformed other markets. A bounce back is quite clearly due.
And the most important of them all.
5. In the case, that Korea and Taiwan are redesignated as "DM", India could be a beneficiary.
When there was an upgrade of Korea to DM in 2009 and as a result India saw net estimated passive inflow of $234mn, while estimated active funds flows were $934mn. The total India weight increased by 116bps in the MSCI index. Keep an eye on the meeting today.
If it does happen huge rally will take place. The stage is set for it !!!
My View : Hold onto your longs. Until 5170 is not broken. We may see markets rallying atleast 10% from these levels. Sentiment is extremely pessimistic.
Markets tumbled upto 600 points intraday on news of changes in tax agreement treaty with Mauritius, source of over 40% for India's total FDI. Nifty made intra low of 5195. However, our level of 5170 was not breached. So our longs still stand. The markets are extremely oversold and a bounceback of atleast 200 points in nifty can be possible.
Several positives have started emerging for the Indian economy in this fall. Lets take a look at the reasons as to why the markets may rally.
1. Inflation has been the biggest concern for the Indian markets. With Crude coming off over 20% from its highs it will provide the much needed relief to our markets.
Every 1$/bbl change in the price of crude affects our trade deficit by US $800mn and our gross under recoveries by US $700mn. So crude oil prices coming off is a big positive.
2. Commodity prices have come off and started to cool off with fears of lower demand for them due to a lower than expected global growth esp US and Europe.
3. Better than average monsoon will improve investor sentiment and cool off food prices (atleast temporarily) and bring down inflation.
4. Our markets have underperformed other markets. A bounce back is quite clearly due.
And the most important of them all.
5. In the case, that Korea and Taiwan are redesignated as "DM", India could be a beneficiary.
When there was an upgrade of Korea to DM in 2009 and as a result India saw net estimated passive inflow of $234mn, while estimated active funds flows were $934mn. The total India weight increased by 116bps in the MSCI index. Keep an eye on the meeting today.
If it does happen huge rally will take place. The stage is set for it !!!
My View : Hold onto your longs. Until 5170 is not broken. We may see markets rallying atleast 10% from these levels. Sentiment is extremely pessimistic.
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