Why Indian stock market is not participating in Global sell off?

1. Why Indian
markets not
selling off?
October 14 2014
Deepak Singh
Twitter: smarket

2. There is Panic in the Developed world
S&P500 trading below 200 dma

3. Panic is for real – Look at CBoE VIX
US market now in High Volatile Period after
long time

4. But Indian market has absorbed the panic fairly well
Indian market has not seen any panic so far. The
response so far has been

5. Similar Thought crossed my mind..
But when you confront market with fact, and not opinion – you will
find that market has a reason for doing what it does

6. Indian market is at 10% discount
Valuations are not that expensive

7. It’s not only Indian market…have you seen
Chinese stock market
Do you see any
panic/nervousness

8. How about Brazil?
Pro Business candidates are winning everywhere and Brazil is no
exception. The investor-friendly challenger candidate in Brazil’s
presidential election has moved ahead in polls and market is excited

9. Here’s what happening
“The concept of fundamental economic reform across emerging markets–
including in China, India, Mexico and Brazil – is gathering momentum and could
cause a re-rating of the asset class as investors anticipate lower deficits, inflation
and interest rates, and stronger currencies and growth in the longer term.”
.
Emerging markets were already trading at steep discount to
developed world and looking ahead – there is no reason for
panic as of now
Source

10. New Political wind is blowing: Pro Business
candidates are winning everywhere
Indonesia's new president Joko Narendra Modi, India’s Prime Minister
Source
CNBC US is already calling pro
business candidate Aecio Neves
Brazilian Narendra Modi

11. How can you forget about Collapse in Crude prices
It’s positive impact on countries like India
.
Source

12. Why Investors have hope?
Indian market is not done with Uptrend. With so much of interest in
Indian market and economy, why anyone would like to sell core
holdings?
There is anticipation of
reforms in next few
months
Inflation is cooling off
and Economy is
showing signs of
revival

13. The WILD CARD: US Dollar
What if US DOLLAR index breaks out above 89? Will that be
sign of Global risk aversion – Nobody knows right now
Source

14. Summary
Does this mean – Indian market will not sell
off? I don’t know. What I am saying –
Market has a reason to not participate in
Global panic as of now?
As always, there is risk in the market – there is no guarantee
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Thank You
• Disclaimer - The state of the market presentation is Deepak's
perspective on the market. The presentation is purely for educational
purpose. Nothing contained herein is a solicitation to trade or a
recommendation of a specific trade. By reading this presentation you
agree to make no trade relying in whole or in part on the comments
of the writers
• Chart Source: Chartalert.com
• For Feedback: Send email to 2deepaksingh@gmail.com
• Twitter: @smarket www.stateofthemarket.net