Sunday, August 6, 2017

Market reaction to China and India War if that happens on Doklam Issue

The top newspaper from China i.e China daily has warned that PLA might start, ‘small-scale operation in 2 weeks’

Following is the excerpt from the paper.

“The Chinese side will inform the Indian Foreign Ministry before its operation,” he told Global Times. Hu also said India would have to “bear all the consequences”, and that ties between the two countries were “severely damaged”.

Hu Zhiyong, a research fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences, the article said,

“The series of remarks from the Chinese side within a 24-hour period sends a signal to India that there is no way China will tolerate the Indian troops’ incursion into Chinese territory for too long.”

What is the fight for ?

The Doklam stand-off began in mid-June when Indian troops stopped the PLA from constructing a road in the area. While Bejiing claims the region as sovereign Chinese territory, India says the area lies at the trijunction of China, India and Bhutan, and it had been decided that no country would take unilateral action there.

How the Indian markets may react ?

Markets on Monday will open a gap up after the new High made by US markets and post that we may see market loosing the gains and may end almost flat.

What if the military operation actually Happens?

There will be some good correction in the markets 5-10% going by the trends from the past that will again be an exciting opportunity for long term investors to make an entry as we may see the markets triple from current levels in next 10-15 years.

What if the military operation doesn't Happens?

Even if the military action does not happen the market will still shed some points and can be assumed to a healthy correction which is long due. The markets are overbought to some extent and may see some healthy correction under such tensed environment.

Who would back India if an actual war erupts ?

Good news is we have a dynamic PM who has made friends all over the world and now is the time when his great friends from Israel USA Germany Japan and France will get an opportunity to help their friends.
A friend in need is a friend indeed

Faadoo Stocks Recommendation

There is nothing to worry make an entry if the correction happens. We personally believe the war would not happen. No country is in a position or wants to have a war but going by PLA's history they may plan an attack if that happens this time it will get a befitting reply from India. Also not to forget Made in China Devices are known to the world. Its not the quantity that matters quality does.

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