Jun 18, 2013, 09.41 AM IST
In the pecking order of risk from a halt in Quantitative Easing (QE), India features as a country with moderate risk, compared to other emerging economies.
Brokerage house Morgan Stanley says the leading indicators for equity returns are in good shape, and that it would be a buyer in the event of a market fall.
According to Morgan Stanley, the three key concerns on Indian equities have been high FII ownership and positions especially in the context of any risk off, the market's complacency about tail risks; and adverse political developments.
The brokerage says that FII ownership and positions have reduced after the sell-off on concerns over the Fed stimulus being scaled down.
"Both may have a bit more to fall before one can say that their overhang has completely gone away," said Morgan Stanley strategists Ridham Desai, Sheela Rathi, and Utkarsh Khandelwal in their note clients.
They, however, added in the pecking order of risk from a halt in Quantitative Easing (QE), India featured as a country with moderate risk, compared to other emerging economies.
"Leading indicators for equity returns (real rates, earnings, liquidity, sentiment and valuations) are in good shape though global liquidity has tempered at the margin," said the Morgan Stanley note.
"The conviction level of market participants is constantly challenged, though, because confirmatory signals remain feeble. We are a buyer of this fall," the note said.
Narrow range movements in Nifty suggest consolidation; another big move is coming soon, maybe on Thursday, almost certainly by Monday December 9
After two days of strong up moves, a consolidation was expected. That has come about. We suggested closing long positions in the Nifty, a trade that gave 100 points. We can expect markets to expand soon enough. Expanding markets suggest big moves. Therefore, the next few days should provide trading opportunities.
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