As we have seen in the past two weeks, FII activity has stabilised. The housing market slump in the US and credit worries (in the US) continue to loom, but their effect on Asian economies is likely to be limited. International investors, fearing a slowdown in the US economy, have reallocated a higher proportion of their assets in favour of Asia in a bid to de-risk their portfolios.
A prolonged slump in the US economy will encourage the Fed to cut interest rates in September, and this is likely to boost sentiment in the markets around the world. While we remain optimistic that the subprime loan crisis will have a limited impact on India, one should not become complacent.
Sameer Koticha Director, ASK Group
I think the Indian market over-reacted to the whole subprime news. The selloff that we witnessed was due to the investor perception that Indian bourses are dominated by foreign investors.
While it is true, I don’t think our market will witness a direct impact of any subprime issues. Broadly, the market will remain unaffected, although there is no denying that there might be instances of few companies losing out on business flowing in from US.
Motilal Oswal, CMD, Motilal Oswal Sec
I think it is too early to say anything. Even institutions have not been able to assess the direct or indirect impact. In India, it would depend on how much the global risk appetite is reduced. However, Indian market would outperform the world market. There would not be a substantial impact on the real economy.
Alok Sama, President, Baer Capital
I think the subprime issue has had limited direct impact on the Indian market. Our markets would react more to performance of individual companies and the forthcoming quarterly results. However, global markets have not fully discounted subprime concerns. On this front there is still more to come.
Ved Prakash Chaturvedi, MD, Tata MF
Subprime concerns will affect us, but I am sure India will remain the least affected among all the major Asian markets. None of the Indian banks have an exposure in the subprime market. But yes, if reports of more hedge funds going bust keep coming in, then selling would set in, especially in large-cap counters as funds will try to sell most liquid holdings first.
Nirmal Jain, MD, India Infoline
No. Indian market is doing well because it was was badly pounded during the recent selloff. If global markets suffer any more on account of the ‘subprime pain’, it will surely spread to Indian exchanges as well.
Though indirect ripples could not be ruled out, subprime should not impact Indian equities directly as it does to European and American markets. As far as inflows are concerned, FIIs appear to be a bit cash strapped, and hence, we would only see moderate infows for some time to come. On the whole, India should be better off than other markets even with subprime fears looming large.
Gagan Banga, eD, IndiaBulls Fin
A prolonged slump in the US economy will encourage the Fed to cut interest rates in September, and this is likely to boost sentiment in the markets around the world. While we remain optimistic that the subprime loan crisis will have a limited impact on India, one should not become complacent.
Sameer Koticha Director, ASK Group
I think the Indian market over-reacted to the whole subprime news. The selloff that we witnessed was due to the investor perception that Indian bourses are dominated by foreign investors.
While it is true, I don’t think our market will witness a direct impact of any subprime issues. Broadly, the market will remain unaffected, although there is no denying that there might be instances of few companies losing out on business flowing in from US.
Motilal Oswal, CMD, Motilal Oswal Sec
I think it is too early to say anything. Even institutions have not been able to assess the direct or indirect impact. In India, it would depend on how much the global risk appetite is reduced. However, Indian market would outperform the world market. There would not be a substantial impact on the real economy.
Alok Sama, President, Baer Capital
I think the subprime issue has had limited direct impact on the Indian market. Our markets would react more to performance of individual companies and the forthcoming quarterly results. However, global markets have not fully discounted subprime concerns. On this front there is still more to come.
Ved Prakash Chaturvedi, MD, Tata MF
Subprime concerns will affect us, but I am sure India will remain the least affected among all the major Asian markets. None of the Indian banks have an exposure in the subprime market. But yes, if reports of more hedge funds going bust keep coming in, then selling would set in, especially in large-cap counters as funds will try to sell most liquid holdings first.
Nirmal Jain, MD, India Infoline
No. Indian market is doing well because it was was badly pounded during the recent selloff. If global markets suffer any more on account of the ‘subprime pain’, it will surely spread to Indian exchanges as well.
Though indirect ripples could not be ruled out, subprime should not impact Indian equities directly as it does to European and American markets. As far as inflows are concerned, FIIs appear to be a bit cash strapped, and hence, we would only see moderate infows for some time to come. On the whole, India should be better off than other markets even with subprime fears looming large.
Gagan Banga, eD, IndiaBulls Fin
