MONEY9: The stock market over the last few months (STOCK MARKET)There is a downward trend. LIC has made record losses to investors. Dollars (DOLLAR)The rupee has reached a historic low against. However, even in such a precarious situation, The marketNo. The two victims are doing their buying and selling routine on a regular basis.
Is a foreign institutional investor. They are selling in huge quantities. On the other hand, local mutual funds are buying Dhoom. Foreign investors made a net sale of Rs 4,164 crore on Monday, June 13, as the market fell by 1,400 points, while domestic institutional investors bought shares worth Rs 2,814 crore.
Now, you may wonder why the mutual funds are buying when the market is constantly declining and foreign investors have been selling for the last 8 months. The reason for their purchase is the unwavering confidence of small investors in the country. Because, small investors are confident that the market will rebound and get a decent return in the long run. However, in the current climate, new investors are moving away from the stock market, as evidenced by the latest figures released by the MFI.
A recent report by the Association of Mutual Funds in India clarifies the mindset of small investors. According to its data, a total of Rs 12,286.42 crore was pumped into the market by SIP in May, an increase of Rs 423.33 crore over April. SIP had invested Rs 11,863.09 crore in April. It is this money from investors that is giving mutual fund companies the strength to buy even in a declining market.
If you look at the picture of debt mutual funds, there is no huge investment like in equity funds. Investors are withdrawing money from debt funds. In May, net investments in equity mutual funds stood at Rs 18,529.43 crore while a total of Rs 32,722 crore was withdrawn from debt-based mutual funds. The reason for withdrawing investment from debt funds is the fear of rising inflation and consequent rise in interest rates. It is because of this fear that investors are distancing themselves from debt mutual funds.
Now, let us know the most important thing behind the statistics, which indicates a possible change. This is a sign of a decline in the number of new investors.
The number of investors entering the stock market through SIP has decreased. A total of 19.7 lakh new accounts were opened in May, the lowest level in 12 months. That is, new investors are scared by the big bang in the market.
Rising inflation, war-torn crude oil prices, rising US interest rates, etc. have caused huge gaps in the Indian stock market, but market experts believe that such problems are plaguing the world, but the roots of the Indian economy are strong and all other emerging. We are in a better position compared to economies. In the short to medium term, as the clouds of uncertainty clear, investor confidence will return and they will be able to keep their money in the market.
However, the situation of the last 8 months has shown that the bullish current in the stock market will come only when the buying mood among foreign investors will change. A market boom is not possible with local investors alone. The market gets some support from domestic investment, but foreign investment is needed for a full boom.
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