On January 1, 2012, the Finance Ministry of India finally declared that it will open the Indian equity markets up to foreign individuals to trade beginning on January 15, 2012. This announcement comes at a time where the Nifty and Sensex have lost much of their value over the past year and it appears that the government is looking for new cash investments to bolster the indexes.
To be able to invest and trade in India as a foreigner, you must become a Qualified Foreign Investor. This means that you would have to comply with certain rules and regulations and taxes would be levied on your profits before you could remove the capital from India. But it is a huge step for increasing liquidity in these markets.
So, why should you care to invest or trade in India? As an emerging market, there is a huge potential for growth. India is the “I” in BRIC. Of course, that growth would occur after the current economic slowdown ends. Another huge advantage is that there are no market makers. India’s stock market is a retail market and therefore, technical analysis seems to work as well if not better than in the United States.
Technical analysis is the study of people’s reactions and emotions to price movement and what they think they know about the companies they are investing in. When you remove the manipulation of market makers from the equation, you are left with a pure supply and demand picture that can easily be traded. This is not to say that there aren’t certain individuals manipulating certain stocks, but for the trained eye, it is easier to spot and protect your capital.
Another advantage is for an individual who has been restricted from day trading in US equity markets due to working hours. The Indian markets are open in the evening in the US. They currently open up at 10:45pm EST (India does not adjust for daylight savings time). West Coast traders can take advantage of evening day trading at 7:45 pm.
Online Trading Academy is a world leader. We are one of the first companies to offer a comprehensive trading course on the Indian markets. Currently, this course is only offered in India and Dubai. However, in the future, with this announcement, we may be opening up this offering to other locations as well. When you get the chance, speak to one of the Online Trading Academy Instructors who have taught in India about the ease that they found in analyzing and trading these equity markets. There may be a whole new part of the world opening up to you as a trader!
– Brandon Wendell firstname.lastname@example.org