Over the past year, India's benchmark BSE Sensex appreciated 64.6%, much more than the 27.8% and 48.1% increases in the Shanghai SE Composite Index and the Hang Seng Index, respectively.
The Indian equity markets are trading at a relatively attractive price-to-earnings ratio of 16.8 compared with 18.3 of the Shanghai Composite Index. This has triggered a wave of overseas investments into the Indian equity markets, driving the benchmark Sensex to around the 18,000 level for the first time since early 2008.
ADR Stock Picks
India's technology sector is largely leveraged to exports and is therefore dependent --to a large extent -- on a broad-based global economic recovery. On the other hand, sectors such as banking and automotive are driven largely by surging domestic demand and, as a result, are more likely to be the clear winners this year.
Indian Economy on a RollAccording to the Ministry of Statistics and Programme Implementation, India's industrial production grew 16.7% during January 2010 compared to the U.S. industrial production growth of 0.8% in the same month. The economy may have expanded between 8.25% and 8.75% during the year ended March, says India's Finance Minister Pranab Mukherjee, adding that the country's GDP probably expanded 7.2% last fiscal year, "which is impressive by global standards." The IMF estimates India's economy to grow by 7.7% in 2010 and 7.8% in 2011, well above the estimated U.S. economy growth of 2.7% and 2.4%, respectively. Moreover, inflation in India is estimated to decrease from 8.4% in 2010 to 4% by 2012. In comparison, China's economy is estimated to grow 10% in 2010 and 9.7% in 2011. However, both China and the U.S. are set to witness an increase in inflation during this period, according to IMF estimates.
Banking Pick: HDFC Bank and Icici BankThe global crisis led Indian banks to address efficiency factors such as cost management, asset quality improvement, and to build liability franchises. Top banking executives told India's Central Bank last week that credit growth is expected to be around 20% during the current fiscal.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV