Simon Maierhofer
Editor, ETF SpotLight

India is not an easily accessible market for foreign investors. Fortunately, there are three "pure bred" Indian ETF/ETNs. While the iPath MSCI India ETN (INP) is the oldest and most actively traded, with a track record going back to 2006, the PowerShares India Portfolio (PIN) or WisdomTree India Earnings ETFs (EPI) are alternatives for investors wanting to stay away from ETNs. None of the above products provide accurate tracking of the SENSEX. Nevertheless, the performance of INP, PIN and EPI correlates reasonably well to the SENSEX and makes them worth a consideration for overseas profit opportunities.

iPath MSCI India Index ETN (INP)

In our 12-01-2008 Weekly ETF Pick, we pointed out that China's Shanghai Composite Index (SSE) broke out of a 12-month descending trend channel. At the time, the SSE traded around 2,000. Based on a Fibonacci retracement (38.2%) of the prior decline, we expected SSE to move towards 2,700. The SSE is approaching 2,500 and the next few weeks might provide a good opportunity to lock in gains.

This week, we noticed that India's SENSEX Index broke out of a downward trend channel similar to the above mentioned SSE. Prior to its recent recovery, the SENSEX had lost some 60% of its value fueled by the global economic contraction. A recent survey conducted by Boston Consulting Group revealed that 16% of Indian consumers plan to increase their spending habits next year while a full 50% of respondents stated that they plan to spend the same amount as last year.

 India ETN/ETFs

iPath MSCI India ETN

INP

PowerShares India Portfolio

PIN

WisdomTree India Earnings

EPI

First Trust ISE Chindia

FNI

Market Meter (The U.S. Equity Markets At A Glance)

 

There are times where the stock market abounds with profit opportunities (such as January - March), and then ... there are times where patience is required. Right now, we seem to be at a point where patience is required. As long as Wednesday's highs (Dow 8,040 and S&P 860) remain intact, the market is suggesting that a retest of the Dow 7,500 level is likely before a continuation of the rally. This does not have to happen in one quick move, it might take a little while.