The share of investments of exchange trade funds in India’s equity markets has increased to 27% in the past four weeks compared with an average investment of nearly 10% in the total foreign assets.
The rationale for selecting these companies is that they may dole out a higher interim dividend in the next few days to save the tax bill for the promoters.
The chinks in the assumption of high double-digit growth for the passenger vehicles (PV) in next fiscal year appears to be turning into the cracks.
Investors are swarming to chase few stocks which have been defying gravity, showing earnings growth in a growth starve world.
The underperformance is likely to continue given the relatively higher implied Return on equity (RoE) amid downgrades in expected earnings per share.
Indian stocks dropped by 23% from its January 2015 highs and joined the bandwagon of the market such as Japan, Germany, China and UK.
Amid concerns over slowing China and soft oil prices, investors across markets are buying safe haven assets like sovereign bonds and gold.
Traders are continuously raising their bets though OTM put options that the stock of India’s largest carmaker will remain weak in the near-term.
The global equities and crude oil price are moving in lockstep, a rare phenomenon that has made the job of fund managers harder.
The equity participation of insurance companies surpassed investment by domestic mutual funds in January, for the third time in two years.
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