INSULATED INDIAN STOCK MARKET

It seems that the Indian Stock Market has pulled up well from the global sub prime crisis faster than other developed markets, which prompted some pundits to state, that our market is well insulated from other major markets (ref). It needs some courage to come out with the above as the markets in the present context are inter-webbed as never before. If we look at the indices for the last three months we will have to agree to this theory. Lets look at our own Sensex against developed market indices….

We have a certain and definite advantage over them. Luckily we have our own well defined market for our products.

But what about our services sector? Let’s pick up the IT industries and check for their movement with Sensex, it is a bleak story over there.

Question can be raised how can our own index can overrule this vital sector, is our index is also manipulated (induction of Unitech in Nifty) to the disadvantage of small investors, who always look up at the indices for market guidance?

Should we be assured of that we are not insulated from the slow down of North American market at least for our flagship industry of IT solution providers. There will be certain growth in the other sectors.

But still it is a "India shining" story retold.