Indian share markets, is it all bull?

The stock markets in India are scaling record heights almost on a daily basis. On Friday the Sensex surged 650 points to touch 23,048 before closing at 22,994. Foreign Institutional Investors bought shares worth Rs 12.69 billion on this day alone. This is apparently because exit polls conducted by a television news channel, predicting a victory for the BJP in the general elections, was leaked. Whether it was done deliberately to manipulate the markets we do not know. Perhaps the SEBI will investigate whether some people bought large volumes before the leak and then sold out when markets reached their peaks, a practice known as insider trading. When elections are drawn out over more than a month all kinds of rumors are bound to proliferate, affecting results as well as markets. However, as foreigners were buying retail investors in India were selling Rs 3.54 billion worth of shares. Number of depository accounts fell by 60,000 in February while 4 million folios in equity mutual funds were closed in 2013-14. " Retail investors completely missed the bus as they have not understood the dynamics of equity markets. They don't understand market cycles," said one Suresh Sadagopan, a financial adviser. Are Indians so stupid that they cannot see money growing on trees? Not so. About 95% of stocks have not gone up in value, some are trading at a fraction of values in 2008 so that investors are sitting on huge notional losses. While the Nifty index has gone up from 6250 in 2008 to 6800, DLF has gone from Rs 1140 in 2008 to Rs 145 today, Tata Motors has dropped from Rs 780 to Rs 230, Bhel has dropped form Rs 2480 to just Rs 170, L&T from Rs 4300 to Rs 1345 and Bharti Airtel from Rs 960 to Rs 300. " The retail investors were anyway not there. Now HNIs have also been trapped as most blue chips are quoting at huge discount than the level achieved in 2008," said Kamal Parekh, Chairman of Stewart Securities. Our markets are dependent on the whims of foreign investors who can sell out at a moment's notice, leading to a collapse in prices. Companies controlled by the government are milked by ministers for political gain, leaving them with no capital for long term investment. When retail investors, and even High Networth Individuals, have lost so much money why did the Congress try to trap ordinary people into investing in shares which are very high risk because of the high degree of manipulation? Because it could take out even more money for handouts. People can see through the mirage.