High Alerts in the Market..
#1. PE ratio for Nifty has crossed 25, stocks are overvalued.
#2. No one is talking about the impact of GST, or they don’t want to talk because positive of GST is already factored in the market, what if it comes negative.
#3. Profitability in comparison to GDP – In developed economy it is 9-14%, in developing economy it is 5-8%, in India it is 4.8% which is the lowest in 10 years.
#4. Emerging Market – FII selects 8-10 emerging market, they keep rotating these funds from one market to other.
#5. Cash holding of MF – It is increasing now because MF are not able to understand where to invest in spite of fund flow.
#6. Forex Reserve – India’s forex reserve is at peak level, RBI accumulate dollars only when they feel that there will be huge redemption of dollar in near future.
#7. Gold import increased 3 times ($3.8 bn from $1.2bn) compare to last year while funds are pulled out of Gold ETF – Why such things are happening is because someone is accumulating Gold in a big way, are they seeing some risk in financial world.
#8. Rally is narrow based it is not broad based rally – Only 10 stocks are actively participating and rest 40 are not participating. Fear factor or RSI is all time low in 24 years.
#9. Credit Rating of India is BBB- means moderate risk.
#10.Geo political tension.
#11.FII sold $345 mn in Apr 2017