Galaxy
Senior Member
- Joined
- Aug 27, 2011
- Messages
- 7,086
- Likes
- 3,934
Well, There are many factors in Equity Market. Sentiments also play important role. 1 month back, Everyone was expecting Sensex at 14,400 when it was 15,400 but today it's 16,400 and most of the fundamentally strong scrips are up between 20%-50% in just 4 weeks. Nothing changed fundamentally but still. Smart one still made money.Stock market ups and downs have much more to do with sentiment and momentum than the economy in the short term. Whenever sentiment is positive or negative it usually does not change very fast. But in more mature markets a decline more than 20% is considered a bear market. Indian market is tied more to energy than Chinese market that is why I think it has not advanced?? Especially when during the period of growth in India you mentioned the price of oil doubled.
It's because market moves because of big money which we call smart money. They invest according to fundamental valuation & global news which is not known to many. Also, There is large chunk of trading takes place by Arbitrageur and Hedge funds and for them, No movement is best move.
Now, on Topic: Why Chinese market had underperformed ?
3 reasons.
1> Because it performed exceptionally well in 90's and till 2007 (till global recession). Valuation was astonishing high like other Emerging market. So, it's consolidating to justify the valuation. IMO, Hang Seng index valuation is fine and in next 4-5 years, It will more than double. Can't say about Shanghai as volume is less and international participation is less.
2> FII's were not investing in Emerging market for last 3-4 years for many reasons.
3> There is a big problem in China. (Competitive export margin and high input cost)
According to my analysis, Both India and China will do well in next 5-10 years. After 2020, India will move ahead and China growth will be very less.
Last edited: