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India 50 by TrendFollower

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For many years I have been investing in JP Morgan Indian Investment Trust and Fidelity India Focus Fund. My returns over the past 15 years or so in these investments are phenomenal. I have been adding to them on a monthly basis over this time period to take advantage of 'Pound Cost Averaging' and I made further lump sum investments during the financial crisis and the subsequent recovery period. 

However around Christmas time (2018) I began looking at the India 50 from a trading perspective. It just recently made a new high.

Basic Fundamental Analysis:

Now Narendra Modi has just won his second election by a far larger majority than his first election. I visit India regularly and some of the projects are very exciting. The demographics are positive for India as they have a large population under 30. If Narendra Modi can ensure that the educated youth have a job which suits their skills set then India has great potential. Another thing he must ensure is that capital is invested in infrastructure. The quality of the roads is a must. I recently went on the Baroda Express Highway and it is as good as any freeway in the US or motorway in the UK if not better so India are improving in this area. 

GIFT City in Gandhinagar is exceptional. I recently had a meeting there and they took me on a tour around the site. It has mind-blowing potential. I include the website below.

http://www.giftgujarat.in

https://en.wikipedia.org/wiki/Gujarat_International_Finance_Tec-City

One must remember that India has a very large population of around 1.4 billion where as the UK has a population of around 66 million. It is being reported that if the current growth for India and UK continues in terms of GDP then India will overtake the UK around 2022 - 2023 to become the 4th largest economy in the world. If this does happen then investing in India and trading India must seriously be considered. 

I include the 'daily' chart for India 50 below for you to see how it has performed over the past couple of years. 

1342591498_India50_20190610_07_14.png.9a785abfff43c243ee58d82a9e2bfadb.png

In my personal judgement, India, over the next five years has the potential under Narendra Modi to experience serious positive growth. It is a market that really excites me. There are some excellent investment funds and investment trusts out there for India but also those who trade indices may want to seriously look India 50 which IG offers. I do accept that margin requirements are a lot higher than the US, UK and EU indices so this will put a lot of people off unless they are professional client for IG which then makes it a lot cheaper to trade. 

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India will require more foreign direct investment. This is a given. With Brexit, the UK's eyes may be on India to negotiate trading deals with them. New roads are being built. This I have seen with my own eyes. It will take time though. Toilet facilities are being provided and of a better quality too throughout India. Again this is a mammoth project. One of the biggest things I have seen evidence of is 'Electrification' and Narendra Modi for me has delivered here. 

A lot of people point out negatives in relation to Narendra Modi. The reality is he has no credible opposition or has any substance. He is India's best bet for long term growth. It is being reported that in around 10 years it could be the third largest economy in the world just being the US and China. What an achieve this could be. If this does happen (I do not know that it will for sure) then just think of the stock market performance India could see over the next 10 years!

GDP growth is around the 7% area which is very impressive. I believe inflation is below 5% but that is a tad too high for me. 

India Is Now Investing More in Solar Than Coal

https://www.ecowatch.com/india-solar-power-investments-2638682086.html

India is currently the fifth largest economy in the world and it is growing faster than any other of the G20 economies. I am a big fan of investing in 'Emerging Markets' and 'Frontier Markets'.

For me, India is a gem in the Emerging Market Universe. 

As India grows I think we will see more and more companies going public which will lead to a boom in equities and the humongous middle class in India begin shifting from Cash, Bonds (Fixed Deposit accounts) and Gold and into Equities. When this happens the Indian Stock Market is going to be a lot higher. 

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India over the next five years is my tip from an investment perspective when it comes to 'Emerging Market' investing.

China is busy in a trade war and dispute with the US. The US market has already shown significant growth since Trump's election and prior. I think India is going to benefit from further investment and interest from all around the world. This will drive up the Indian stock market so India equity investment for me remains very attractive. 

I want to share the following article with you below:

India becomes investment darling for sovereign wealth and pension funds

https://uk.reuters.com/article/uk-india-investment-swf/india-becomes-investment-darling-for-sovereign-wealth-and-pension-funds-idUKKCN1TM0JK

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hi well india 50 is down rite now by 2 to 300 points from were it should be mainly bcoz of budget how u see it when it is going to correct itself and any technical analysis for this indice that u prefer....

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@MYK1,

Indian Equity Markets are merely correcting. I invest in JP Morgan Indian Investment Trust have done for many years now. I just use the sharp corrections as opportunities to add to my investment. I invest every month into it and again have done this for many years.

I visit India on a regular basis and the growth I am seeing their is just simply phenomenal. The BBC, ITV, Channel 4 and Sky will not always show the goods parts of India (it is a vast country in size) and you tend to see video clips of poverty and slums when it comes to countries like India. 

Narendra Modi has won the recent election and has the largest mandate in recent times to really make some progressive and positive changes in India to drive growth and GDP. I am confident he will give it a real good go. 

These corrections are pretty normal when you look at the Indian stock market over the past few years. It all depends on whether you are an investor or trader when it comes to India. In terms of trading India 50 it all depends on what timeframe you are looking at and what your trading strategy is. Your question is a bit too vague. 

The one thing I need to add here is that I have a 'positive bias' when it comes to investing in India. I openly admit that though I try to see both the positives and negatives of investing in India. Also I do not have a crystal ball and do not practice magic so I cannot say when it will correct itself or what it will do next minute or tomorrow. 

I would be extremely surprised if it went below 10600's. India's growth story is still in tact and the narrative is as strong as ever. It is whether India can deliver the growth of 8% or more that is required now. 

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Yes for sure it is a growing economy with a lot of opportunities in it but my question was about recent price action of india 50 two fundamentals really affected it budget on last friday and the second one US increasing tax on india exports dumping down from 11900 to 11500 zone... well lets se wat it does....

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@MYK1,

I do not see India stock markets tumbling or crashing down too far. Yes it may be a deep correction but with a longer term view I see the Indian stock market making new highs as it attracts more investors around the world who think they are getting better value than before this correction. 

Price action will tell us if my assumption will be correct or not. I do not disagree with your post. The simple answer is that I cannot know for sure that it was those reasons why caused the price to decline as other major equities across the world have declined so it could have been a case of Risk Off rather than Risk On. Even if you are correct then these will merely be short term movements.

The key psychological price point that I do not want to see India 50 hit is below 10000. That would be bad news if that were to happen. It must defend that price level at all costs. 

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India 50 is showing a large and sharp correction. It seems to be liking the 11000 level but as I said in my previous post it must defend the 10000 level. That is the critical price point for me. If it does then I see this as an excellent buying opportunity and a very good price level to start thinking about adding to your positions if you already have invested in India.  

One must put this downward move into context. When developed markets begin any sort of decline in equities, the emerging markets will fall greater and the frontier markets will fall even further. India has fallen greater than the US and UK. This is what we have witnessed. Yes India 50 could go down further towards 100000 level but if it does then it could present a fantastic opportunity to invest more capital in a country whose stock market I see higher than current levels in five to ten years time.

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India 50 is still staying above the 11000 area. Of course there is the wider market correction occurring in major worldwide indices. You then have the US-China trade war and Brexit along with issues in Iran. To add to this which is more significant for India is the India-Pakistan tensions over Kashmir. This makes the Indian markets very volatile at the moment. It is that dose of volatility that can create and present opportunities. 

India for me has more compelling arguments for a long term bull market than it does against it. There is political risk which will be one of the biggest risks India faces but if it can manage this effectively then opportunities await.

For now I would wait and see if 10000 price level is going to be revisited. 

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So where is the India 50 right now?

The price 'daily' did not go below 10000 level and it is currently around the 11000 level. So there is support within this range bound price activity. 

672484730_India50_20190915_09_23.png.01b43014441beb6891ff0df68bf7173a.png

For me any drop in price below the 10600 level presents a bearish scenario. This is of particular significance with so much political risk in India. There is also a higher chance now of economic risk too due to what is happening around the world. I am a long term investor in India and have been for many years so I will use any large corrections or drops as a chance to add to my investments as I believe in the longer term narrative and story for India's growth. However, for traders, they need to be clear that shorter term India could be very choppy to trade and extremely volatile. 

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India's stock market rose the most in around ten years yesterday. I have been investing in India for many years now and have seen some stellar growth over the past couple of decades.

India's Prime Minister, Narendra Modi, has in my opinion just lit the fuse to turbo charge Indian equities (bearing any major economic / political events). Corporation Tax has been reduced from 30% to around 25.75%. India's GDP growth had been declining from around 8% over a year ago to around 5% currently. Don't get me wrong, the UK and US would love to have 5% GDP growth but they are two of the most developed economies in the world. India's is looking to overtake the UK very soon and I think it will and chase the leading pack of US and China when it comes to GDP. This is going to be a very long journey and India has made large inroads under Modi. 

From an investment perspective I think it would be wise for any 'Capital Growth' investors like myself to have exposure to India in their portfolio's if they already do not have so. For those that do then they may want to consider increasing their exposure with a 5 to 10 year horizon at least. 

From a trading perspective, next week, will be very interesting. One may want to keep a close eye on the India 50 to see how the price behaves. 

Now with the UK you have Brexit which poses some risk to UK equities. You have Germany playing with recession which could have an impact on German equities and domino effect into European equities. US and China are going through a trade war which leaves India (as long as their are no major bad news events) a prime candidate to take advantage of the capital sitting on the sidelines or in Bonds, Gold and developed world equities. If that shift happens within the next 2-3 years then the current valuation of Indian equities is going to look cheap in my personal opinion. 

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A wonderful and masterful speech from Indian Prime Minister, Narendra Modi, in Houston, Texas - USA. This was in front of the President of the United States, Donald Trump. 

What was more remarkable was that it was the quietest I had seen Trump. Modi talking and Trump listening in his own backyard. This was quality. The crowd in Houston was incredible.

I visit India frequently and I also invest in India. I visited only last year G.I.F.T City in Gandhinagar, Gujarat and the work being done in India's world class SMART City is just incredible. I think there are only around four SMART cities of this calibre in the whole world and India has one of them. I was given a tour around this and it really is incredible. The investment potential is enormous. I shall let you research this on the internet yourselves rather than take my word for it. If you are interested then just have a look at the link below.

 http://www.giftgujarat.in

Obviously construction work will take a few years but what I saw last year was very impressive.

There are times when this project has been slow and a lot of money has been invested but I think it is getting closer to where it wants to be. This is just one example. 

If you look at the work Modi's government has done with giving people access to 'Cooking Gas' and provision of sanitation,  it is brilliant. 

India is an economy which is going to grow. It is a growth play. It has a very large population of which the number of middle class is an enormous market for large global companies. It has an impressive higher middle class. Modi stated in his speech that data is not only the new oil but the new gold. 1 GB data is 25 to 30 times cheaper in India than the world average. 

Ignore India in your investment portfolio at your peril. 

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India 50 up 150 points and it is only 5:00 am UK time. 

What I found rather interesting was the lack of coverage of the 'Howdi Modi' meeting between Trump and Modi yesterday on Sky News or BBC News. Bearing in mind the leader of the most powerful country in the world (Trump) and the leader of one of the biggest emerging countries in the world (Modi) were on a stage together and the lack of coverage on Sky News and BBC News was astonishing. I watched it on CNN.

It reminds me of how the UK TV media show all the poverty in India. However there is immense natural beauty in India and also serious wealth along with some luxurious parts in India. The UK media just do not show this on TV. It is like the  other countries around the world only showing the run down council estates (high benefit culture) in the UK with extreme poverty on their media channels and never showing Central London, Lake District, parts of Scotland and all the natural beauty and luxurious estates the UK has to offer. It would not give a true picture to the audience. 

All countries will have two sides to it. The best parts and the worst parts. The media needs to start showing both parts. This can influence investors thinking if in their minds they see India as a third world country which is poor and has lots of poverty. It can form a bias in their thinking from an investment perspective. 

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Two hours later. It is now 7:00 am UK time and India 50 up over 300 points!

Remember my mantra - 'Strongest Trending Assets'

It is about identifying them as early as possible. Here is one potential example. 

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India 50 on the 'daily' has just taken out is 20, 50, 100 and 200 DMA's. A very sharp and quick upward rocket of a move. 

344274977_India50_20190923_19.25-2.png.77d26f2f9dc448e12dde0ff41874c995.png

Modi's Corporation Tax reduction and from 30% to 25.75% and 'Howdy Modi' have been the drivers from a 'fundamental' perspective. 

Just have a look at the fantastic performance from the Indian Investment Trusts, Unit Trusts, OEICS and ETF's. 

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India 50 is motoring upwards in line with other major world indices. 

1751277878_India50_20191104_18_25.png.6c59893c94ec0902763f062973092071.png

There are a few questions and one of them is whether the India 50 can make a new high? I think it will certainly have a go. Another question is how will it deal with the 'resistance' it is about to face? I think there will be a sharp correction before it can go up and make new highs and stay there for any reasonable time. Profits will need to be taken at some point by the institutional investors, especially the large fund houses. They have to sell in order to be able to document actual returns achieved by their funds. What they will then do if they think India's market has more legs is to go back in lower once they have taken their profits. 

India has the potential to really outperform its rivals over the next five years if Narendra Modi can push through some of the reforms and plans that he has. I think India is going to be a very attractive and exciting market to invest and trade in over the next decade. 

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India 50 is trying to move higher.

1344013355_India50_20191125_20_38.thumb.png.626c2af303d224f45da4520de350af9f.png

If you look at the past couple of years then its trajectory upwards is not as intense as from 2015 to middle of 2017. This is showing an exhaustion in the longer term trend but shorter term it is looking like it is trying to make a new high. 

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