SENSEX CLOSE IN 2009 : 17465..SENSEX LEVEL NOW AT 11.09 am,MAY 17,2010 : 16628
Down 367 points from Friday Close….but down 5% from 2009 Close
FII EQUITY FLOWS AND SENSEX MOVEMENTS …A CLEAR DICHOTOMY IN 2010
|
Year |
Net Investment US($) million |
Sensex % Movement in the Year |
|
2005 |
10707 |
42 |
|
2006 |
8106 |
47 |
|
2007 |
17655 |
47 |
|
2008 |
(11974) Outflow |
(52) |
|
2009 |
17458 |
81 |
|
For 2010 till May 14, 2010 |
6148 |
(5) |
Total FII FII Equity Investments : US $ 78.76 Billion
Registered FIIs :1714 Registered Sub accounts : 5369
India remains a great Investment Destination…But have a look above….whenever we’ve seen huge FII Inflows,the Sensex has simply run away….in 2008 when we witnessed huge outflows,the Sensex sank,only to recover brilliantly when inflows topped US $ 17 billion in 2009
But 2010 has been a revelation…There is a clear dichotomy between FII Inflows and the Sensex…In Four and a half Months yet in 2010 we’ve seen strong FII Inflows of US $ 6.1 Billion…a strong part were in IPOs….one would have expected the Sensex to power ahead…Instead it has buckled 5% till date today from 2009 close
It’s a clear Macro Warning…India remains coupled to World Markets….the disturbing PIIIGS Solvency Scenario in Europe and the Debts and Deficits of USA continue to spook the Global World…It’s a contagion that’s being tackled
Beginning of the Year in January 2010,I had blogged that the Sensex range will remain in the 14000 to 18000 for the first part of 2010…when it touched 18000 a few weeks ago,I had given a macro warning that we’re at the top end of the range and extreme caution should be exercise when playing the Indices or Trading…the onbly way to beat the Indices benchmark would be specific selections
Don’t get unnerved by this Volatility…it’s part of the Equity Experience….just stay focussed on Long Term Goals and Proper Asset Allocation when playing out your Strategy
And I continue to reiterate,as I’ve been for a few years now….do consider GOLD strongly….it’s moved from US $ 650/oz to over US $ 1200/oz now….My first target was US $ 1000…it reached this late in 2009…Beginning 2010,I had said that Gold would touch US $ 1200 in 2010…it’s done so in May itself !…..My next big target is US $ 2500 inside a few years…..and then US $ 5000 !……given the huge uncertainties and poor visibilities in global economic recovery in USA,Europe and Japan…and the liquidity tightening in China to reduce fears of any Asset Bubble Formation…any Investment in Equity,anywhere in the World….and even in Debt,I daresay, should be done cautiously and with complete understanding of the Risks involved