Drought is not in our Sensex’s Dictionary ! FIIs is !…crosses 16000 to record a Calender ytd High Close Today

Our Sensex is on a Calender Year High Today…..In 15 trading days,it has surged from 15000 to 16000..It closed at 16016 today,up by 327 points and over 2%

Drought does not seem to be in our Sensex’s Dictionary !

From March 2009 Lows of 8000,the Sensex has now surged 100% in just seven months ! and year todate it has given 65% gains

At 8000 the Valuations were compelling…at 16000 not any more…the markets are being driven clearly by liquidity

Evidence of this Liquidity exists in the FII Inflows

Jan to March 2009 we saw FII reversals with net outflows of over Two billion dollars from Indian Equities…but since March lows,FIIs have pumped in US $ 10 Billion to record a net Inflow in 2009 of US  $ 8.1 Billionso…in contrast Mutual Funds have invested under US $ 2 Billion in this period

We’ve clearly seen what such significant FII Flows can do with the Sensex…have a look yet below

Year

FII Flows  (US $ b)

Sensex up by

( %)

Sensex

Opening

Sensex

High

Sensex

Low

Sensex Close

P/E

P/BV

DY (%)

2005

10.7

42

6626

9443

6069

9398

16.2

3.9

1.6

2006

8.5

46

9422

14035

8799

13787

20.2

4.8

1.4

2007

17.2

47

13828

20498

12316

20287

22.3

5.3

1.1

2008

(13.1)

(53)

20325

21207

7697

9647

18.2

4.2

1.3

2009

8.1

65

9721

16016

8047

16016

16.5

3.1

1.6

A simple Observation will tell you that in the Calender Years when FII Inflows were good and great (Green) the Sensex surged brilliantlybut in 2008 when we saw a heavy reversal of FII Flows (Red) ,the Sensex collapsed

The Sensex was crying out loudly end October 2008 and early March 2009 to tell us to stop whipping it so much when it hits lows of below 8000 and 8000 respectively…Heavy Duty Selling by FIIs  clearly caused these lows…”Buy Me ! Have Faith in Me !” was the Sensex Cry….The Valuations,both Macro and Micro were compelling…Sensex P/E below 10….Some good scrips available at below 3 P/E

Then from March 2009 FIIs again realised ‘India is Great’ and so far in seven months have pumped in over US $ 10 Billion and this heavy duty buying has surged the sensex 100^ to today’s 52 week high and ytd high of 16016 

Most did not benefit from this superb recovery…Either No Cash or No Conviction or Both…Their Sentiment and Moods and Thoughts and Perceptions were swinging and being heavily influenced by all the the swinging Views of Experts on all Stock Channels

India remains a Compelling ‘BUY’…I title blogged this a few days ago asserting “BUY INDIA”

Don’t let the FIIs ‘carpetbag’ India…Our Media candy sucks up FII views every hour….your mind is being bombarded with these views…so it’s easy to get influenced….to be fair some of our local experts too are candy sucked….listen…understand….question….check logic,rationality and presence of vested interests….and don’t get swayed…think independently before you act on any advice. 

And they debate that we are decoupled !!!

Cheers !

 

4 thoughts on “Drought is not in our Sensex’s Dictionary ! FIIs is !…crosses 16000 to record a Calender ytd High Close Today

  1. Hello Gaurav,

    How are you ? I am asking for something unconnected to this news item. I was curious if you are planning to come out with review of oil india ipo? i am eagerly awaiting your analysis before i make a decision to apply. Please also take into consideration the effect of govt administered Oil price hike of 44% being discussed by govt

    Thanks,
    Ravi

  2. Gaurav i look forward to your Oil India IPO take – based on valuations – 2yr horizon and fundamentals – is it wise to invest or explore other options

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