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Topic : The Art Of Trading Safely....
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Can Indian equities ever remain immune to bad news?

Created by : Kiran Kumar Reddy, Business Analyst, SAP  | 08 30 2010 07:44:10 +0000
Industry : Hedge Funds/VCs/Private EquityFunctional Area : India(Markets)
Keywords : stocks shares equity market indian stock exchange indian equities bad news effect on the market negative news
Activity:  280 views;  last activity : 09 11 2010 10:07:27 +0000

How many times have we seen market crash just when there is some bad news on the horizon, as a layman in this field, I see time and again that bad news are really critical in the Indian equity market. There might be various reasons that affect the market and how stocks perform. But my question to all of you is that, Can Indian equities ever remain immune to bad news?

  
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The recession period of 2008 and 2009 has been a sort of a boon for India. The world realised that Indian financial system was strong, stable and resilient. It also highlighted that India was the least impacted economy in the worst financial turmoil in the developed world. We do believe that India, this time, will be much less impacted even if there is bad news in the world. So yes in future Indian equities will remain immune to bad news....
By Kiran Kumar Reddy, Business Analyst, SAP  08 30 2010 07:44:10 +0000
 
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Mr. Kiran, I am not agree with the point that at the time of recession Indian Equities were less affected.We have seen mass selling pressure in equities.The price of most of equity became one third(or even more) than prior to fall occur in market. Market usually reacts on every news whether it is good or bad as per their importance.

Yeah we can say that some time instant reaction will see against news whereas sometime later. But reaction is always there. It is a too big concept.

But I am agree with the point that Indian economy proved his strong ness as compared to others not the equity market. Most of good equities are still struggling to reach at their own levels prior to fall. We can conclude it with sentence " Equity Market fail to show the actual strength of Indian Economy". if we analyze it with sector wise performance......

 
By Vipin Bhasin, Private Equity/Hedge Fund/VC-Manager, Indian Investment Co.  08 30 2010 12:55:51 +0000
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no Indian markets cannot be immune to the bad news as Indian markets are in evolving phase.FII are the major investors in market and they their decisions affect the sentiments of the market in a big way.
By Danish khan, Business Analyst, cognizant business consultancy  | 09 06 2010 04:34:49 +0000
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In fact our equities are immune to bad news but fluctuations are there in value of stocks in accordance with the market volatility. however, capable of bounce back to reinstate its position, this is because of our mixed economy systems that India is having. India is neither having capital nor socialistic economy. our economy is capable of meeting any types of recession. i think the credit goes- i don't know i am right or wrong- to one economy called the  black money in circulation that gives all sustainability in India. friends please correct me in case i am wrong since i am not good/expert in equity trading.

thanks for the referral Mr. Kiran Kumar Reddy,


By NATTERAJA R. ARIKRISHNAN, GM-Projects, Bentec Electricals & Electronics Pvt. Ltd  | 08 31 2010 06:34:37 +0000
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Mr. Punkajkumar,

If I am not wrong, what the concept look for is, " Can the equity be unaffected by bad news?" . Factors such as investments, exports are the parameters that affect the equity. Now, can there be a viability to keep the equity unaffected by bad news? say financial crunch, external / internal terrorism etc?. I think this is what  they look for.
By KALIYAMOORTHY , Oil & Gas Area Coordinator, Undisclosed  | 08 30 2010 16:56:19 +0000
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Yes but on the condition that Harshad Mehtas, ketan parekhs have to be taken care of
By kanukurthy sudershanrao, Operations Manager, Andhra Bank  | 08 30 2010 15:04:09 +0000
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Kiran I agree with you partly since today the world knows the strength of our economy but stock exchange has its own way and will react both on good news and bad news.
By Rathin Deb, Freelance Retail Consultant  | 08 30 2010 14:12:30 +0000
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The fact that our markets move up and down with simple news is indicative that there is a time for it to mature. As long as a few people control and move the markets , maturity is a distance away
By harish , Commander, Government  | 09 11 2010 10:07:27 +0000
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I agree Mr.Bhasin,in time of recession Indian equities were effective but here we are discussing immune to bad news & i voted 'NO'
By VEERINDER SINGH(B-P.VIHAR), Associate/Senior Associate, BHART CAPITAL SERVICES  | 09 06 2010 11:47:51 +0000
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Indian equities cannot remain immune to bad news...In fact, the equity market is always dependent on the vagaries of the business conditions which drive the market up or down. Despite the difficult economic conditions in 2008/2009, the Indian equity market was able to manage itself (even though there was a steep fall in the share prices of all the major stocks)....

Compared to other international financial systems (especially US), the Indian financial system is stronger as it has a series of checks and balances that ensure that despite scams and other related matters, the financial system is buoyant enough to hold its own....

Thanks for the referral, Natteraja....
By Badri N Srinivasan, Head - Quality, Valtech India Systems Pvt. Ltd.  | 08 31 2010 08:12:44 +0000
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I agree to Vipin Sir here....

The concept here i would see is a Causality concept Indian equities has causal relation with US and UK markets which means that changes in US and UK equities will effect the Indian equities i.e. will have an effect.

Also to note that FII is a "Huge" investor into the Indian markets which means that changes in the world i.e. foreign will have an impact on the investment decision of the FII which in turn will effect the investing decision on Indian Equities.
By Urvish Pankajkumar Subodh, Guest Lecturer (Economics), H.L.College of Commerce- H.L. Institute of Commerce.  | 08 30 2010 14:57:57 +0000
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No, it need not be.If the total equities find a local market constantly, whatsoever, the bad news is, it will hold its value.Share value depends on dividend, capital income & these are directly proportional to the sales ;that means the purchaser. If all the purchaser are found in local market, probably, the bad news will carry little effect on the equities.This maintains the stock.

Big problem is that all stocks can not find a local market & thereby, influenced by the news & other parameters.
By KALIYAMOORTHY , Oil & Gas Area Coordinator, Undisclosed  | 08 30 2010 11:58:12 +0000
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