If a 5% to 10% fall in the equity market gives you sleepless nights, you are not cut out for a 75% to 80% allocation to equities and must reduce it.
'Retail investors, who had not seen such a massive correction in the SMID universe since COVID-19, are witnessing something like this for the first time. Panic profit booking may continue.'
Benchmark Sensex advanced 110 points in a choppy trade on Wednesday, extending its gains to the fourth day in a row helped by buying in HDFC Bank, ICICI Bank and fresh foreign fund inflows. The 30-share barometer rose by 110.58 points or 0.14 per cent to settle at 80,956.33 with 14 of its constituents ending with gains and 16 stocks with losses. During the day, it jumped 399.64 points or 0.49 per cent to 81,245.39 and dipped to a low of 80,630.53.
Even as net flows into smallcap funds in March turned negative, for the first time in 30 months, they remained a big draw for new investors. The smallcap fund category saw a net of 360,000 investment accounts, or folios, getting added last month, the second-most among all active equity categories. Smallcap funds' continued traction could be driven by their strong performance across timeframes, say experts.
The Indian equity market clocked record average daily turnover (ADTV) in both the cash and derivatives segments in February amid a spike in volatility. The ADTV for the cash segment for both the exchanges combined came at Rs 1.27 trillion, while the same for the derivatives or the futures and options (F&O) segment stood at Rs 483 trillion in the previous month. The volumes for both cash and derivatives have almost doubled from a year ago on the back of rising retail participation in the world's fourth largest equity market.
'If their allocation to certain segments have become high due to strong returns over the past three-four years, they should rebalance their portfolios and bring them in line with their long-term asset allocation.'
'We emphasise the importance of not basing investment decisions solely on electoral outcomes.' 'Instead, focusing on investing in high-quality businesses capable of prospering regardless of the political landscape is paramount.'
Those who cannot bear significant downturns (as much as 40 per cent) or have a short horizon should exit entirely.
'Sell in May, go away' is a popular market adage. But 'Don't sell any new shares in May' is the best kept secret of Dalal Street that's set to break. Sample this: the last four General Election election cycles starting 2004 have not seen a single initial public offering (IPO) launch during the month of May.
'Given the inherent volatility, investors should take at least a three to five-year view.'
'The biggest near-term risk to Indian equities is the outflow of investments to China as tactical trades by foreign investors.'
Cash trading volume declined in 2022, even as benchmark indices outperformed their peers. The average daily trading volume (ADTV) for the cash segment fell 18 per cent year-on-year to Rs 61,392 crore (NSE and BSE combined). The ADTV for the futures and options (F&O) segment (NSE and BSE combined) stood at Rs 125 trillion (notional turnover), up 117 per cent from the previous year.
Indian benchmark indices may witness bouts of volatility this week as traders roll over positions in the derivative segment on expiry of near-month contracts, say experts.
'Auto, pharma, and industrials have delivered well in the recent quarter, while businesses like quick-service restaurants, consumer staples, and durables have underperformed in volume growth.'
Among the main gainers were Jio Financial Services which jumped 4.99 per cent, Tata Steel (2.09 per cent), Maruti Suzuki (1.87 per cent), M&M (1.31 per cent) and Infosys (1.19 per cent).
Shares of small-cap companies have been on a roll with the S&P BSE Small-Cap index hitting a new high in intra-day deals on Thursday. The rally has been fueled by an up move in stocks of chemicals, cement, graphite electrode makers, pharmaceuticals and information technology (IT) shares. In the past two weeks, since March 25, the index has outperformed the market by gaining 7.3 per cent. In comparison, the S&P BSE Midcap index was up 6.1 per cent, while the S&P BSE Sensex gained 3.6 per cent during the same period.
Mutual funds focused on small-caps have emerged as the winner with a net inflow of close to Rs 11,000 crore in April-June quarter, as fund managers struggle to create alpha in the large-cap space, and the trend is expected to continue for some time. On the other hand, large-cap space, which is yet to pick up momentum, witnessed an outflow of Rs 3,360 crore during the quarter under review, data from the Association of Mutual Funds in India (Amfi) showed. Apart from the June quarter, small-cap funds logged an inflow of Rs 6,932 crore in three months that ended in March.
Wall Street-correlated stock markets are facing the risk of correction, as Christopher Wood, the global head of equity strategy at Jefferies, conveys to investors in his latest edition of GREED & fear. Rising crude oil prices, which are nearing $100 a barrel (Brent), pose a threat to the global central bank's battle against inflation and have led to a re-evaluation of its exposure to Indian stocks. "The potential for more US Federal Reserve (Fed) rate hikes, combined with the risk that monetary tightening finally bites as regards the economy, remains a risk for Wall Street-correlated world stock markets. "There is also the oil factor. This is why GREED & fear continues to believe the pain trade is down. "Areas in Asia, such as Indian midcaps, which have already done very well, are at obvious risk of some profit-taking," writes Wood.
The BSE SmallCap index gained 106 per cent in the one year ended May 12, 2021.
The 30-share Sensex ended up 214 points at 27,890 and the 50-share Nifty closed up 52 points at 8,430.
On the last day of FY!5, the Sensex ended lower by 18.37 points at 27,957.49.
Stellar rally in ITC shares along with strength in the Asian equities capped the downside.
Equity flows turning positive could give fund managers firepower to invest in the markets. This could come in handy as flows from foreign investors have tapered off amid rising bond yields in the US.
The one-year returns for equity-oriented mutual fund (MFs) schemes have largely mirrored the gains made in the secondary market. However, schemes that invest in infrastructure (infra), small-cap, and public sector undertaking (PSU) banks have emerged standout performers, with gains in excess of 100 per cent in some cases. Of the total 484 equity schemes, 353 have managed to beat the Sensex, reveals the data provided by Value Research. Around 20 have delivered returns in excess of 90 per cent and six schemes have given returns of over 100 per cent in the past one year. The S&P BSE Sensex Total Return Index (TRI) has given returns of 51 per cent in the last one year, ended October 29.
So far in September, the S&P BSE Small-cap index has gained nearly 3 per cent as compared to a modest 0.2 per cent dip in the S&P BSE Sensex.
The BSE Midcap and the S&P BSE Smallcap indices outperformed to gain 0.6% and 1.1%, respectively
Investors should avoid jumping from their current funds into those that have outperformed lately, advises Arnav Pandya, a certified financial planner.
Sensex dull at close, Infosys rules, ITC drags.
Bank Nifty pared all its intraday gains to end over 1% lower led by losses in BoB, ICICI Bank, Axis Bank and Bank of India
Over the past one-and-half years, the number of stocks trading below their respective face value has increased 29 per cent after a sharp correction in stocks of small-cap companies.
Investors not stop their SIPs or STPs due to election-related uncertainty.
Fear factors weights on markets, Sensex, Nifty struggle to keep pace.
Rebound in IT majors TCS and Infosys in late trades helped markets end higher.
The top gainers on the Sensex are Gail(India), HDFC, Infosys.
BSE Power, Healthcare, Capital Goods, FMCG and Metal indices gained between 0.6-1%.
The Sensex has hit its lowest level since August 29, 2016 whereas the Nifty hit its lowest level since Sep 12, 2016
Investors brace up ahead of the key macrodata- IIP and CPI numbers due to be unveiled tomorrow.
Sensex is trading firm; FMCG, real estate going strong.
Index heavyweights were the top losers along with bank shares.
The 30-share Sensex ended 50 points lower at 28,112 and the 50-share Nifty declined 12 points to close at 8,531.
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