Volatility forces retail investors to troop out
Mumbai: The sharp stock market fluctuations over the last few weeks seem to have unnerved retail investors so much that they stepped up selling in the last two weeks, making the net outflows so far this month the highest in the last 19 months.
As per BSE’s category-wise investor turnover data, ‘clients’ – it is a term that includes retail investors and high net worth individuals or HNIs – have so far sold equities worth Rs 1,375 crore in the last nine sessions of this month. This is the retail investors’ highest monthly outflow since February 2012 when they had sold equities worth Rs 1,454 crore.
Market volatility, exemplified by the Sensex first cracking over 2,000 points from 20,300 to 17,996 and then recovering almost the entire loss, all within a period of one-and-a-half months, seems to have prompted many an investor to book profits or exit their positions in the last few days.
Retail investors usually follow advice of big brokerages. But this time round, they seem to be as confused as analysts. The recent rupee depreciation, along with the RBI’s tightening measures, had prompted many a brokerage to go underweight on India. But then, a sudden change in sentiment post the arrival of the new RBI governor Raghuram Rajan, seems to have changed their outlook.
Last week, however, saw retail investors selling equities worth Rs 933 crore as the Sensex hovered close to 20,000 amid an uncertain outlook. The fast-changing global and domestic events, be it the feared Fed tapering, the Syria crisis, the currency fluctuation or the bleak growth outlook, all seem to have played a part. Going ahead, nervousness amongst retail investors is likely to persist till markets consolidate, experts said.
Jayant Manglik, president - retail distribution, Religare Securities, believes that this week is going to be an eventful one as the wholesale price index or WPI inflation data for August is due along with the mid-term monetary policy on September 20. “Currently, the NSE Nifty is trading in a narrow range of 5800-5900. Only a decisive breakout will trigger the next directional move. On the higher side, 6000 holds a key resistance while any decline to 5700 would result in emergence of buying.”