There is no connection between the Nasdaq and the Indian markets. There is a difference between the kind of companies listed there and here. A movement in the Nasdaq over the longer term can, at the most, give indications about the movement of FII money into the technology sector, says Rajat Jain, CIO, SBI Mutual Fund. Sentiment across funds is exactly the same with almost all fund managers we spoke to expressing the same opinion. The Nasdaq has a whole load of dot coms that do not have revenue models.
Most Indian companies have healthy revenue and profit flows.
The Nasdaq therefore cannot be an indicator. The stage of development of our markets is different and our companies are different. Therefore, the Nasdaq cannot be an indicator of tech valuations in India. At best the correlation can be limited to the two stocks of Indian origin listed there. Even Bharat Shah, CIO, Birla Sun Life AMC, indicated a similar sentiment when he spoke to Investor's Guide last week.