www.infystocks.co.uk

11 September 2007

GLOBALCUES

he phrase ’global cues’ is a way of explaining the positive/negative effect of events in other markets on Indian stocks. Global cues have an impact on Indian stocks because of two factors. First, India’s financial markets and its economy have developed greater linkages with the rest of the world, as companies trade, expand their operations, acquire and borrow actively overseas.

Second, there has emerged a large class of global institutions and funds that dabble in and actively switch money between stocks, bonds and currencies from across the world. Such investors today play a key role in stock market movements.

As equity markets in Europe and the US mature, those seeking higher returns on their investments have made a beeline towards the emerging markets, India included. Foreign Institutional Investors have pumped in nearly $60 billion (over Rs 2.5 lakh crore) in Indian equities so far and are major stakeholders in Indian companies. As their radar is always on for the best investment opportunities worldwide, any change in interest rates or stock prices at any of the major global markets has a bearing on their investment decisions for India.

by erectusplus at 16:29:00 |