Click to play videoMumbai: Investors are hoping with every passing day that the crash is over but in spite of favourable domestic economic conditions the Indian markets continue to seesaw through violent mood swings.
Wednesday was no different with the Sensex losing 453 points at the opening bell on the back of an Asian crash.
The crash was sparked off by:
>>The Nikkei, which lost 502 points (2.92%)
>>The Hangseng was 496 points down (2.57%)
>>The Singapore Straits times lost 96 points (3.04%)
>>The Shangai Composite lost 58 points (1.97%)
FIIs like the Citigroup feel, with record inflows heading to India, there is no way Indian markets can remain insulated from the global risk factors.
“What has happened in last 2-3 years is foreign fund inflows have developed co-relation with global risk appetite and whenever we see changes, the markets around the region including India gets impacted. This current correction is part of that,” said Citigroup Investment Research MD Ratnesh Kumar.
The global factors are:
- The World's largest economy, US is slowing down
- Unwinding of the Yen carry trade is resulting in an outflow of FII money across Asian markets including India
- In a Bear Market scenario, Indian stocks are looking expensive at current levels
Markets analysts are now favouring a cautious approach and say small investors should stay out.
“The best thing would be to stay out of this market and wait for direction to emerge. You don't need to wait to put your money in the market every second day. This time the bounce will see much smaller and you will get a chance to buy whatever stock you want to buy at your own leisure,” said Eidelweiss Capital MD Anand Tandon.
The investors’ cup of woes is already near full and add to this the burden of rising interest rates. And it seems that the next buying opportunity will be some way off.
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