Impact of Global events overplayed

I feel that we tend to overplay impact of Global markets on Indian stocks especially for events happening in US economy. Recently US jobs data showed positive developments. Some blogger at some other site tried to project the impact that Indian markets will go up because of this.

According to my humble experience, events happening in a different country may not have material impact on Indian stocks unless the event has a direct bearing on India specific FII inflows or exports or businsess.

The most talked about event is movements in stock markets in other countries. If some or all global markets like NYSE, NASDAQ, Korea, Tokyo, Singapore, Taiwan, Hong Kong, London, etc. are up, there is a tendency to presume that Indian stocks will move up. But in reality this is a highly speculative presumption and may not correlate with Indian stock movements.

Several analysts have talked about the emerging markets decoupling from the US markets. I do not believe in this thesis. I think that the globalization will continue apace. Our thesis for the next decade is homogenization. Eventually, pricing, transparency, commissions, and compliance will be very similar in all markets.

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