Welcome, Guest |
Login |
Remember the “Asian flu” that rocked world markets in 1997? The Indian rupee has now smashed through all support levels keeping it from where it was back then. Nobody wants to catch this stagflationary knife.
India’s economy (EPI, quote) took another turn for the worse this week when data released yesterday indicated a rise in consumer prices, bucking a trend of decreasing inflation.
U.S. investors often stereotype the Indian economy as a cluster of gigantic technology outsourcing companies. But those who bought into the ETFs that most closely conform to that stereotype would have been left lagging not only the real Indian stock market but Wall Street as well.
Ratings agency Standard and Poor’s has cut India’s credit outlook to negative over multiple structural concerns plaguing India’s economy.
The heaviest weighted stock in India has plunged nearly 16% since its earnings spooked global traders on Friday. Despite the carnage, reaction from analysts and ETF investors has been muted — revealing that the selling may have gone more than a little too far.
A note of caution for traders who have tried to get exposure to emerging markets via the BRIC countries of Brazil, India, Russia and China. Indian ETFs have run up ahead of their earnings and look like less of a bargain relative to their counterparts.
For the last few months, Infosys (INFY, quote), Wipro (WIT, quote) and other IT providers have been worried about drops in their clients’ discretionary spending. Actions speak louder than words, though, and analysts at ICICI Securities report that Infosys is hiring like it expects more business soon.
