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For the first time in over a year, global investors have gone back to being ‘neutral’ on the Indian <a href="http://www.businessinsider.in/searchresult.cms?query=markets">markets</a> compared with the overweight position that they had held since October 2014. This was stated by the latest edition of the Bank of America Merrill-Lynch Fund Managers’ survey. 
 
The dip in euphemism among global investors amply reflects a growing perceptive that Indian equity markets are undergoing a correction and investors need to be cautious. 
 
According to the survey, it is the first time since October 2014 that India is falling out of favour from being most overweight. 
 
In fact, foreign investors have turned bullish on India since 2014 Lok Sabha elections, hoping that the new government will help revive economic growth by bringing far reaching reforms and addressing structural issues, leading to a spike in foreign inflows into Indian equity markets. 
 
In 2014, foreign investors pumped in a whopping $16.16 billion in Indian equities, helping the market surge close to 30%. 
 
Indian stocks also benefited immensely from the fall in crude oil prices, which coincidentally started falling in June 2014. The <a href="http://www.businessinsider.in/searchresult.cms?query=modi+government">Modi</a>-led government made use of this opportunity by ending subsidies on diesel in October 2014. 
 
In contrast, since September this year, the benchmark BSE Sensex fell more than 10% while the Nifty too marked a sharp fall. 
While the slowdown in China (Chinese equity markers declined more than 30% over the last few months) was an obvious trigger, the prolonged surge in markets—which lasted for more than a year since the run-up to the polls last year—was anyhow necessitating a correction. 
 
Overall, volatility in <a href="http://www.businessinsider.in/searchresult.cms?query=emerging+markets">emerging markets</a>, concerns over worsening global risk environment, weak earnings outlook, collapsing commodity prices, a stronger US dollar and higher bond yields have forced fund managers to pull their positions to close to record lows across markets. This means what is happening in India is not an aberration. 
 In the past 17 months since assuming power at the Centre, the BJP government led by <keyword id="6354814" type="UNKNOWN" weightage="20" keywordseo="prime-minister-Narendra-Modi">Prime Minister Narendra Modi</keyword> managed to set a clear direction for economic growth, enliven the spirits of investors at home and elsewhere by announcing a slew of structural reforms. 
 
The reforms included removing adversarial and oppressive direct tax measures (now domestic taxation processes are simpler—tax returns can be filed online and taxpayers can get refunds online) and made a considerable headway in its attempt to implement GST—the biggest indirect tax reform measure envisaged in the country’s history. 
 
However, abysmal levels of capex by private firms remain a concern as Indian companies continue to be over-borrowed and overstretched. 
Corporate results that continue to be subdued too have proved to be a dampener for the markets. 
 
In fact, despite broadly stable EBITDA margins, net profit margins remain on a downtrend, and are 1.8 percentage points below their 20-year average of 11.7%. Among the reasons for poor profits of Indian corporates are high interest costs and depreciation and amortisation expenses owing to increased debt. 
 
Besides, the loss of BJP in the state elections in Bihar came as a major setback for the Modi-led government, hurting the market sentiment further. 
 
While BJP had last year faced defeat in state elections in Delhi, the loss in Bihar is much more damaging as the state has much bigger say in Rajya Sabha (BJP was hoping to improve its tally in the upper house through a win in Bihar). The government that has already been facing a challenge in getting key reforms ratified by the upper house where it is in minority is likely to see a stronger opposition paralysing its initiatives in the future. 
 
In addition, an impending interest rate hike by Janet Yellen-led US Federal Reserve continues to weigh down on India as a reversal of rate trend in the US after almost a decade is expected to pull funds out of emerging markets including India. In fact, a far higher proportion of respondents in the Bank of America Merrill-Lynch Fund Managers’ survey are expecting the Fed to hike rates this year (the proportion of respondents expecting a Fed rate hike in December jumped sharply to 81% compared with just 47% last month) and many investors are betting on a stronger dollar as a consequence. 
 
However, the India story continues to be a strong and intact. Indian macroeconomic indicators remain relatively strong. The country recently shifted its method of assessing economic output from GDP (gross domestic product) to GVA (gross value added). It also revised the base year to 2011–2012 from 2004–2005. This resulted in economic output for fiscal 2013–2014 being revised to show a 6.9% pace instead of the 4.7% estimated by the GDP method. According to latest data, India’s GDP rose 7.3% in fiscal 2015, up from the 6.9% growth witnessed in fiscal 2014. 
 
Besides, the primary markets are beginning to see an uptrend after a lull of almost two years. More than a dozen companies have filed draft papers with markets regulator SEBI for public offers since the new government took charge at the Centre in May 2014. 
 
Besides, many companies, which scrapped their IPO plans earlier due to bad market conditions, have been keen to make another attempt to enter the capital markets. These translated in to a modest uptick in IPOs so far during 2015. The uptrend in IPO market is likely to have a positive effect on secondary market as well. 
 
Besides, as China slows down, India’s position as an investment destination get a boost as FIIs looking to infuse funds in emerging markets would need a relatively safe haven to park their funds. 
 
While global cues remain subdued, if Modi government continue to remain committed to pushing reforms and the opposition sees reason to support them, Indian markets are likely to overcome headwinds in the long run as the India story continues to be positive at the broader macroeconomic level. 
 
(Image: Indiatimes)

Why Indian equity market is likely to overcome headwinds

Thomson ReutersLeon Cooperman, chairman and CEO of Omega Advisors, speaks during the Sohn Investment Conference in New York Lee Cooperman's Omega Advisors expects the rampant bull market to slow down."It is time for the U.S. equity market to rest," Cooperman and Steve Einhorn, Omega's vice chairman, wrote in a letter to investors last week. A copy of the note was reviewed by Business Insider. The 56-page letter continued:"Notwithstanding our expectation that the in-place U.S. equity bull market should persist, for the first time in quite some time, we are of the view that U.S. shares should be trendless/uninteresting at around current levels for a number of months...we would not be surprised if the S&amp;P500 was at roughly the same level in late summer/early fall as it is currently."Omega was up 6.5% in the first quarter, according to the letter. The returns before and after fees were listed as the same.Last year, the Securities and Exchange Commission charged Omega and Cooperman with insider trading. Cooperman has said he is innocent and that he will fight the charges. <h3>NOW WATCH: <a href="http://www.businessinsider.com/watches-worn-most-powerful-ceos-world-tim-cook-jeff-bezos-immelt-2017-4">These are the watches worn by the most powerful CEOs in the world</a></h3> Please enable Javascript to watch this video

OMEGA: 'It is time for the US equity market to rest'

Highly influenced by the reform agenda of the new government to revitalise the economic growth, Foreign Institutional Investors (<keyword id="6368141" type="COMPANY" weightage="80" keywordseo="FIIS">FIIs</keyword>) have poured in a whopping Rs. 17,000 crore in the <keyword id="886139" type="UNKNOWN" weightage="80" keywordseo="Indian-capital-market">Indian capital market</keyword> since the beginning of this month. 
 As per the latest official data, net <keyword id="6362476" type="ORGANIZATION" weightage="80" keywordseo="investments">investments</keyword> by overseas investors in the <keyword id="44794" type="UNKNOWN" weightage="80" keywordseo="Equity-market">equity market</keyword> were Rs 6,665 crore ($1.1 billion) from September 1 to 12, while they infused a net amount of Rs 10,432 crore ($1.72 billion) in the debt market during the period, taking the total to Rs 17,098 crore ($2.8 billion). 
 
Market analysts anticipate that inflows would continue in the coming months on a slew of measures announced by the government. 
 
Since the beginning of the year, foreign investors have made a net investment of Rs 1.98 lakh crore ($33 billion) into the country's securities market. 
 in nearly 22 years, strong inflows in the recent months have taken the cumulative net investments of FIIs, the main driver of the <keyword id="444236" type="UNKNOWN" weightage="80" keywordseo="Indian-equity-market">Indian equity market</keyword>, to Rs 9.88 lakh crore ($204 billion). This is based on the data since November 1992 when the FIIs began investing into Indian markets and includes about $160 billion investments into <keyword id="45369" type="CITY" weightage="80" keywordseo="equities">equities</keyword> and about $44 billion in debt markets. 
(Image: indiatimes)

FIIs Pump In Rs 17,000 Crore In Indian Capital Market In September So Far

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="http://static6.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/janet-yellen-chart-shows-how-fiscal-policy-has-been-a-huge-drag-2013-2"></a></td><td><a href="http://www.businessinsider.com/hedge-fund-sp-500-correlation-2013-2"></a></td></tr></tbody></table></div>Back in 1900, the UK had the world's largest equity market, according to <a href="http://www.investmenteurope.net/digital_assets/6305/2013_yearbook_final_web.pdf">a research report from Credit Suisse</a> (via <a href="http://www.ritholtz.com/blog/2013/02/thursday-pm-reads-12/">Barry Ritholtz</a>).
Soon after, the U.S. and barring a three-year period in the late 1980s, it has stayed that way.
One of the more interesting stock markets to look at is Japan's.
Japan's stock market capitalization (or market value) all but disappeared in the 1940s following WWII. At the time, stocks lost lost 96 percent of their real value. But, "from 1949 to 1959, Japan's 'economic miracle' began and equities gave a real return of 1,565%."
From the report:
"At its peak, Japan accounted for 45% of the total market capitalization of our 22 countries. Then the Japanese bubble burst and, by the end of 2012, Japan’s proportion had fallen to just 8%, while the USA still accounted for 51%."
<div class="image-container click-to-enlarge" style="width:618px"><div class="image"><a title_source="Credit Suisse" title_caption="" class="zoomin" href="http://static6.businessinsider.com/image/51156986ecad04e86900002f-960/moneygame-cotd-020813.jpg"></a></div>Credit Suisse</div>

CHART OF THE DAY: How The World's Biggest Stock Markets Evolved Since 1900

Mumbai: The Indian <keyword id="19949639" type="General" weightage="100" keywordseo="rupee" source="keywords">rupee</keyword> turned flat at 83.94 against the US <keyword id="19904292" type="General" weightage="20" keywordseo="dollar" source="keywords">dollar</keyword> in early trade on Friday amid concerns over elevated crude oil prices and the outflow of foreign capital from domestic <keyword id="19949641" type="General" weightage="20" keywordseo="equity-markets" source="keywords">equity markets</keyword>. However, a positive sentiment in the domestic as well as global equity markets and a weak American currency supported the rupee, <keyword id="19950258" type="General" weightage="20" keywordseo="forex" source="keywords">forex</keyword> traders said. At the interbank foreign exchange, the rupee opened at 83.93 and slipped further to trade at its previous session's closing level of 83.94 against the greenback. On Wednesday, the rupee settled 3 paise higher at 83.94 against the US dollar. The forex markets were closed on Thursday on account of the Independence Day. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally lower by 0.01 per cent at 102.80. Brent crude, the global oil benchmark, declined 0.25 per cent to USD 80.84 per barrel. On the domestic equity market front, Sensex surged 811.34 points, or 1.03 per cent, to 79,917.22 points. The broader Nifty also climbed 246.20 points, or 1.02 per cent, to 24,389.95 points. Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 2,595.27 crore, according to exchange data. On the domestic macroeconomic front, <keyword id="20196568" type="General" weightage="20" keywordseo="wholesale-inflation" source="keywords">wholesale inflation</keyword> fell to a 3-month low of 2.04 per cent in July on the decline in prices of food items, especially vegetables, government data released on Wednesday showed. The latest government data released on Wednesday showed India's exports contracted 1.2 per cent to USD 33.98 billion in July, while the trade deficit widened to USD 23.5 billion.

Rupee turns flat at 83.94 against US dollar in early trade

Mumbai, The rupee appreciated 7 paise to settle at 83.30 (provisional) against the US dollar on Friday, following positive cues from equity markets and strong domestic macroeconomic data. Forex analysts said easing crude oil prices in the international markets also favoured the local currency. Global crude price retreated from the level of USD 84 to USD 80 per barrel as oil-producing countries' grouping OPEC+ agreed not to reduce output in 2024, they added. At the interbank foreign exchange, the rupee opened stronger at 83.29 against the dollar and traded between the peak of 83.25 and the lowest level of 83.36 against the American currency intra-day. It finally settled at 83.30 (provisional) against the greenback, registering a gain of 7 paise over the previous close. The rupee settled 5 paise lower at 83.37 against the dollar on Thursday. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.19 per cent lower at 103.30 on Friday. Global oil benchmark Brent crude futures declined 0.23 per cent to USD 80.67 per barrel. On the domestic equity market front, Sensex surged 492.75 points, or 0.74 per cent, to settle at 67,481.19 points. The Nifty advanced 134.75 points, or 0.67 per cent, to 20,267.90 points. A monthly survey on Friday said India's manufacturing sector continued with its robust performance in November. The seasonally adjusted S&amp;P Global India Manufacturing Purchasing Managers' Index (PMI) rose to 56 last month from the eight-month low of 55.5 recorded in October. Foreign institutional investors were net buyers in the capital market on Thursday as they purchased shares worth Rs 8,147.85 crore, according to exchange data. According to the government data released on Thursday, India's gross domestic product (GDP) growth of 7.6 per cent during July-September beat most estimates, including 6.5 per cent projected by the <keyword id="6354335" type="General" weightage="80" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>), retaining the country's tag of the world's fastest-growing major economy. Also, another data released simultaneously showed that the output of eight key infrastructure sectors jumped 12.1 per cent in October 2023 against 0.7 per cent expansion in the year-ago period. The government's fiscal deficit at the end of October touched 45 per cent of the full-year budget estimate, as per the data released by the <keyword id="513373" type="General" weightage="80" keywordseo="controller-general-of-accounts" source="Orion">Controller General of Accounts</keyword> (CGA).

Rupee tracks buoyant equity markets, rises 7 paise to 83.3/USD

New Delhi, Mar 18 () The government should create a Sovereign Wealth Fund (SWF) by transferring its stake in PSUs as well as some unlisted firms to stabilise the Indian equity market and reorganise the disinvestment programme amid the coronavirus pandemic, according to former finance secretary Subhash Chandra Garg. The Indian stock markets have lost over 35 per cent of their market capitalisation in the last three weeks amounting to over Rs 40 lakh crore, which incidentally is more than the entire budget of the Government of India for 2020-21, Garg said in a blogpost on Wednesday. This market turmoil has also put the government's disinvestment programme in complete disarray, he said. There is no likelihood that the disinvestment programme can begin in earnest for at least six months and the strategic sale of BPCL, CONCOR and SCI is also likely to get derailed for some time at least, he added. "It is unlikely that the government would commence sale of LIC anytime soon with financial companies getting routed the most," he said, adding that Air India sale will also be impacted. "The Government has two massive tasks before it. First, preventing the madness which has overtaken the equity markets to preserve the real businesses and values of Indian companies. "Second, re-organise the disinvestment programme taking into consideration the reality of the situation," he said. These objectives can be served if the government creates an Indian equities value preservation Sovereign Wealth Fund, he said. This fund can be created by transferring the Government of India stake in all the listed companies and also some valuable unlisted companies. Their combined valuation would be about Rs 15 lakh crore, he estimated. "Capitalisation of SWF of such large capital will allow the SWF to borrow from the market adequate amounts, in excess of (Rs) 10 lakh crore, easily. This war-chest can be used to buy equities of fundamentally strong companies available less than their intrinsic values," he said. "Once the market stabilises, which it would definitely do - may be in a month, or three months or six months, the SWF can sell the equities purchased to pay back the debt taken," Garg said. This operation would be a kind of Troubled Asset Relief Programme (TARP) launched in the US in the wake of global financial crisis in 2008, he noted. After creating the SWF, the Department of Public Asset Management (DIPAM) would also not be required, Garg said. BKS ABM

Create SWF to save equity market from coronavirus impact: Garg

<ul><li>Mark Grant of B. Riley told CNBC "the biggest concern for the <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword>, frankly, is the election." </li></ul><ul><li>The chief global strategist said there's risk because of the distinct differences between the Democratic and Republican tax proposal plans.</li></ul><ul><li>Grant suggests investors have more cash, buy ETFs that have shorts, and buy puts as protection against the <keyword id="9782104" type="UNKNOWN" weightage="60" keywordseo="election-risk">election risk</keyword>. </li></ul><ul><li><a href="https://www.businessinsider.com/?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestutm_source=msn.com&amp;utm_medium=referral&amp;utm_content=msn-slideshow&amp;utm_campaign=bodyurl?utm_source=markets&amp;utm_medium=ingestts&amp;utm_medium=ingest">Visit the Business Insider homepage for more stories</a>.</li></ul>Mark Grant, of B. Riley, told CNBC on Tuesday the "biggest concern for the markets, frankly, is the election." The chief global strategist of fixed income said there's a "distinct differentiation" between the Democrats' tax proposal plan and President Trump's. "Democrats are proposing a higher tax for people and a higher capital gains tax, the opposite of what president Trump is proposing," Grant said. "I would have some protection going into this election," Grant said. The strategist has been telling people and institutions to have more cash than usual to brace for the election. He suggested investors should "have some shorts out," buy exchange-traded funds that have shorts, and also buy puts. Read more: <a href="https://www.businessinsider.com/joel-greenblatt-book-interview-common-sense-education-immigration-social-security-2020-8">Warren Buffett disciple Joel Greenblatt averaged 50% annual returns over 10 years. He shares an investor's approach to solving some of America's most glaring problems right now — from education and immigration to social security.</a>Grant also told CNBC he believes the <keyword id="145517" type="PERSON" weightage="60" keywordseo="equity-markets">equity markets</keyword> will "continue to go up from here." The interview took place roughly two hours before the <a href="https://markets.businessinsider.com/index/s&amp;p_500_500">S&amp;P 500 index</a> touched a record intraday high of 3,395.06. Grant said the move in equity markets has been fueled by investors who can't find any <keyword id="6355374" type="DEFINITION" weightage="60" keywordseo="Yield">yield</keyword> in bonds and are flooding into more promising stocks. He added: "The underlying fundamentals for the markets and unemployment and production and manufacturing are doing much better than many people thought, which also lends a floor if you will to where we are."

Global strategy chief says the biggest concern for markets is the election, and breaks down the best ways to protect investments heading into November

<div style="float: right; margin: 15px 0 20px 20px;"><table border="0" cellspacing="0" cellpadding="0"><tbody><tr><td colspan="2"><a href="http://static6.businessinsider.com/category/chart-of-the-day"> </a></td></tr><tr><td><a href="http://www.businessinsider.com/map-states-vulnerable-to-sequestration-2013-2"></a></td><td><a href="http://www.businessinsider.com/chart-hedge-fund-gold-allocation-falls-2013-2"></a></td></tr></tbody></table></div>Often times, when bad news hits the economic fan, investors will dump stocks and run for the exits.
And this is just about the worst thing an investor can do, according to <a href="https://www.fidelity.com/viewpoints/investing-ideas/weathering-volatility">a new report from Fidelity Investments</a>.
“The old adage says that day to day the market is a voting machine, but over time it’s a weighing machine,” said Fidelity's Focused Stock Fund manager Steve DuFour. “If you focus on fundamentals rather than noise, you can use volatility to your advantage.”
Weathering volatility, or simply doing nothing is a pretty solid strategy, said the report. 
And buying when everyone is selling might be even more effective. When expectations are low, any improvement in the global economic outlook can drive strong market gains, said the report.
Indeed, some of the strongest days in the market occur during these periods of high volatility. And missing out on just a handful of these days can be devastating to your long-term returns.
Here's a chart from <a href="https://www.fidelity.com/viewpoints/investing-ideas/weathering-volatility">Fidelity</a> that shows how much an investor risks losing when they miss just a few good days in the market.
<div class="image-container click-to-enlarge" style="width:620px"><div class="image"><a title_source="Fidelity Investments" title_caption="" class="zoomin" href="http://static3.businessinsider.com/image/5127cd4feab8ea2b1300000c-960/screen%20shot%202013-02-22%20at%202.30.41%20pm.png"></a></div><a href="https://www.fidelity.com/viewpoints/investing-ideas/weathering-volatility">Fidelity Investments</a></div>

You Searched For "equity market" and got 9 results

Why Indian equity market is likely to overcome headwinds

Preetam Kaushik

OMEGA: 'It is time for the US equity market to rest'

Rachael Levy

FIIs Pump In Rs 17,000 Crore In Indian Capital Market In September So Far

BI India Bureau

CHART OF THE DAY: How The World's Biggest Stock Markets Evolved Since 1900

Lisa Mahapatra

Rupee turns flat at 83.94 against US dollar in early trade

PTI

Rupee tracks buoyant equity markets, rises 7 paise to 83.3/USD

PTI

Create SWF to save equity market from coronavirus impact: Garg

PTI

Global strategy chief says the biggest concern for markets is the election, and breaks down the best ways to protect investments heading into November

Emily Graffeo

CHART OF THE DAY: Missing A Few Good Days In The Stock Market Will Cost You

Lisa Mahapatra

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