Black Monday Sensex -1600. What Next, Is India still Shining Star?

On 24/08/2015 (Monday) there was earthquake on Indian markets. Market Open -900 and at close it was -1624 points. Last 7 years one day lowest level and Investors lost 7 lakh Crore in one day. If we see history, the biggest downfall was in 2008 because of US Subprime Issue. First time Chinese Effect seen on Indian Markets this time. Four years ago China economy grows by 13% and now it was 7%. To boost china market china govt. encourages retail investors to invest in stock market. So china market was UP 150% in one year. But bubble blast ad china market down 40% in last few months. Yuan Devaluation was also having effect because of that Indian rupee was its last 2 years low, Low Monsoon, Bad Quarterly Results and Major Bills in Loksabha all had effects on Monday so FII sells.

So what next Is India still Shining Star? Yes Of course. Check it how.

Sensex was -1624 on Monday and that was huge down in one day but that was not all time downfall in one day. By % basis it was 29th big downfall in one day and it was 5.94%. The biggest downfall was in 1992 because of Harshad Mehta Scam in stock market and it was 12.77%. As compare to that it was 50% less downfall.

In 2008 when market falls that time Sensex P E Ratio was 28 which is overvalued. Now Sensex P E Ratio is 20 which are not overvalued.

On Monday there was fear effect on day traders and Futures traders so they close their positions also had Margin call hits. But who invest for long term doesn’t care of this as Warren Buffet said “You want to be greedy when others are fearful. You want to be fearful when others are greedy.”

After China Yuan Devaluation Indian markets effects less as compare to other world markets. Second best after New Zealand. It shows that FII have positive view on Indian markets as compare to other emerging markets.

Some more positive reasons:

Indian GDP will go 8% in 2015-16.

Industrial Production goes 3.8% from 2.5 % in May.

Indirect Tax Collection grow 37% in Apr. - June 2015.

Low cost Crude oil save almost 1 Lakh Crore this year.

Inflation rate come to 3.8% and WPI goes below zero in 9 months.

Current account deficit come to low as 1.3% of GDP.

Country’s foreign currency reserves reached the highest level of $ 355 billion.

GDP growth forecast by International Monetary Fund is 7.5% for India. US 2.5%, China 6.8%, Europe 1.5%, Russia -3.4%.

After 2008 USA and Europe markets are still in Recession. Crude oil low cost affects OPEC countries and Russia. Japan is in recession last 20 years and China GDP growth was at lowest.

So if we control some of our own issues like enough demand for loans, Increased Bank NPA, Reforms related bills in Loksabha, India will be Shining Star in world.

So please stay invested in Market. Don’t be panic like what happened on black Monday make these days as opportunity to enter in market. It is not possible to capture market high or low to anybody, so make SIP (Systematic Investment Plan) at your own or invest in diversified mutual funds for long term.

Thank You

Stay Invested!


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