Indian stocks get treacherous

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Very quietly, the once-darling of the emerging world has turned into a mess. Between government corruption probes and a lot of profit taking,  Mumbai is down9% in a little over a month.

Investigations into everything from phone license bribes to outright price manipulation are causing what some local traders are causing an atmosphere of “panic” selling in India as foreign money heads for less tainted assets elsewhere. Even companies that are nowhere near the scandals — currently localized in sectors like telecom and food distribution — are suffering in this reversal of sentiment.

Take a look at Tata Motors (TTM) for a sense of the mood in Mumbai. This is a great company and a great long-term story, but a terrible recent chart.

Now apply that formula to the broad India funds like INP and PIN:

A lot of global crossover guys are caught in this crossfire. Some do not even know which names they own in these crowded banking and technology names, and any pick-up in tension could create some messy exits.

Be careful here. There is more downside to go before this market can go back on its rallying course — much less challenge the 21,000 peaks again any time soon.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs , International

Referenced Stocks: IPN , PIN , TTM

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