Fundamentals: US vs Indian Markets

[deepstock]

I've been reading Jim Cramer's ( of sqawk box fame) book 'Get Rich Carefully'. One of his themes is that trading in US index futures is so large that it can and is pulling individual stocks in the index up or down.
My question is: Does the same thing happen in India too? ie does individual stocks get pulled up or down by the nifty futures?

 

[amitrandive]

I've been reading Jim Cramer's ( of sqawk box fame) book 'Get Rich Carefully'. One of his themes is that trading in US index futures is so large that it can and is pulling individual stocks in the index up or down.
My question is: Does the same thing happen in India too? ie does individual stocks get pulled up or down by the nifty futures?

DeepStock

That is bound to happen,with so many fund managers,algo traders trading in Nifty Futures.
Also the composition of Nifty changes with time.

 

[deepstock]

Amit,
That looks like the tail wagging the dog. Would you please tell how this is done ? ie. manipulating nifty futures to pull up or down individual nifty stocks..

 

[amitrandive]

Amit,
That looks like the tail wagging the dog. Would you please tell how this is done ? ie. manipulating nifty futures to pull up or down individual nifty stocks..

Deepstock

This is difficult to show or prove on paper.You will realize this only after spending some time in the market.

The CNX Nifty index is a free float market capitalisation weighted index.If the index falls , it will obviously drag down the heavily weighted stocks along with it and vice versa.