Sensex and Nifty being pumped up by FII Inflows to go to 20000 and 6000 and beyond respectively….Tread carefully in the short term

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
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