With world economy fearing US recession and inflation hitting the roof with commodities like crude & gold prices trading off the charts; we are stood up with a question as to what can a beginner investors like NRIs (Non Resident Indians) strategize to make money by investing in the Indian stock markets like – NSE: National Stock Exchange and the BSE: Bombay Stock Exchange. Global markets have witnessed some real bad times in the past 2 months where Asian markets have almost seen major correction in various benchmark indices of up to 15% -30%.
Financial analysts at top banks like Barclays, JP Morgan, Merrill Lynch, etc primarily see the US sub prime mortgage as the major cause behind the turmoil that we have seen in the equity markets. Rising inflation in the US, credit tightening, mortgage fiasco has made business hard for the stock brokers all around the world; and this has also affected the Indian brokers and sub brokers. Some analysts believe that their brokerage business has gone almost 50% down, in both mutual funds and stock trading segment. Financial companies are seeing that NRIs are now quite reluctant to openNRI accounts and some brokers are saying that the markets are bottoming out in India and we are quite close to see some action returning in the Indian stock market, and also in the derivative market (future and options).
There are some PIOs – person of India origin who strongly believes in India and its booming economic growth story, and on that note they believe that the share prices of various blue chip stocks are looking very attractive to buy at these levels. Some sources also mentions that OCIs – overseas citizens of India and other major mutual and hedge funds are accumulating some good size on shares with anticipation to cash in the long run.
We at NriInvestIndia.com are actually assuming that these are some good levels to buy shares and not sell. NRIs can get some real bargains and cheap prices on value stocks; and they can hope to make money in longer run. However this just an assumption from our trading desk, and the final decision to buy and sell or invest totally depends on the investor. The markets have been volatile in the past few weeks and have shown some real drama on the charts; however we hope that the dust settles in the coming weeks and we will get a chance to see more inflows in NRI Investment sector. The fundamentals are still intact and growth story of India is not yet over, thus we believe that there is still a lot of juice left in the Indian capital markets. Perhaps, we might not see investors making money with the speed at which they had made before when the sensex went from the 14000 level to 21000 levels. However, there is still lot of potential to make money provided the clients diversify their investments in right mix. They can invest in commodities, stocks (using their demat account), top performing mutual funds, insurance, futures, etc.
To conclude, the markets still look very promising and one should wait for the right time to enter with the right approach that too with a balance of some great investment products. After all only those people will make money who site great investment opportunities in India at the right time and invest with prudence.