Judge for yourself that the liquidity through relentless FII Inflows is pumping up our Sensex to reach 20000 and go even beyond……. ofcourse the suspicion lingers whether these FII Inflows are genuine,are sustainable and are being applied for long term investments…and they are not hot monies that can cause havoc if they reverse out of India,equally fast
FII EQUITY INFLOWS OF US $ 16 BILLION TILL DATE IN 2010 DRIVING OUR SENSEX TOWARDS 20000 AND BEYOND
TILL SEPTEMBER 20,2010
In Stock Exchanges : US $ 12 Billion
In Primary Markets : US $ 4.4 Billion
In September 2010 itself till date : US $ 3.4 Billion
|
Date In September 2010 |
FII Equity Inflow in US $ Million |
Cumulative FII Inflow in US $ Million |
Sensex Close |
Points Up by from Previous Day Close |
|
8 |
101 |
101 |
18667 |
22 |
|
9 |
253 |
354 |
18800 |
133 |
|
13 |
572 |
926 |
19208 |
408 |
|
14 |
376 |
1302 |
19347 |
139 |
|
15 |
498 |
1800 |
19502 |
155 |
|
16 |
247 |
2047 |
19417 |
(85) |
|
17 |
370 |
2417 |
19595 |
178 |
|
20 |
412 |
2829 |
19906 |
311 |
Clearly Caution needs to be exercised at these levels as some Alerts have popped as as below
-
All the Low Beta Defensive FMCG Blue Chips,HUL,Colgate and ITC moved up strongly by over 4% today
-
On a Historic basis Sensex P/E climbs towards 24,P/B towards 4 and Dividend Yield drops to 1
-
IPO Market is heating up…there are a record 11 Issues this week…the grey market has hotted up
-
Suspicion mounts that the FII Inflows could have been orchestrated for the short term….maybe just a coincidence that PSU,Coal India’s Mega IPO opens next month…so sentiment must be kept propped up
Tommorrow you will see Sensex open up past 20000 and Nifty past 6000….Sensex may try to even reach 21000 inside a month and cross the all time high of January 2008…then what !….just tread cautiously…rebalancing your portfolio to return to pre decided asset allocation levels….booking trading profits and remaining in cash for awhile….hope for a significant correction to 16500-17500 levels to commit yet again…..ultimately Valuation always remains the critical criteria….we are getting expensive…Too many Small Cap and Mid cap Companies are beginning to make Heavy Promises and announcing plans to raise funds…..Too much Liquidity driving up our Indices too fast for Comfort
Just Tread Carefully in the Short term as Liquidity is driving the Momentum and Sentiment…and not Valuations
These FII Inflows are strengthening our Rupee…it’s Rs 45.70 to the Dollar today
Don’t be in a position where you are left holding the Straw a month or two down the line !
Would not be a bad idea to consider hedging and buy some cheap put options as Sensex and Nifty keep surging…better to be safe than sorry….we have had some shaking precedence on this in recent years