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September 15, 2010The Indian Stock Market is consistently making new highs as Foreign Money Surges into India it its hunger for yield.FIIs this year have invested almost $15 Billion into the Stock Markets as Indian Economy grows at a rapid 8%+ growth.Along with Thailand,Malaysia,Indonesia and other emerging markets,Indian Stock Markets are approaching Bubble Territory of the late 2007 and early 2008 days.Substantial Risks are being ignored by the Herd Mentality of Portfolio Managers who are lapping up India’s Growth Story.Domestic Money on the other hand has been very circumspect during the last 1 year.Domestic Mutual Funds have become aggressive sellers in the last leg of this rally while Retail Investors are Bailing out Enmasse.
Retail Investors have sold around $2.5 Billion of Stocks in the last 1 year when the Stock Market has catapulted by almost 25%.This is one of the strangest bull markets as Indian investors remain largely skeptical of this rally.Besides this rally a flood of junk IPO offerings which have falling sharply in listing have eroded the confidence on the Indian Investors.Manipulation by Big Market Operators continues unabated with the Stock Market Regulator looking the other way.No wonder the Retail Investor is running away from the Market
Gujarat retail investors wary of markets – DNA
According to figures available from BSE, FIIs and domestic institutions have on a net basis bought equity shares worth over Rs34,000 crore on the BSE and NSE between October 2009 and September 2010. Out of it, FIIs alone account for Rs30,884 crore, while domestic financial institutions (DFIs) account for Rs3,306 crore.
On the other hand, retail investors have sold shares worth over Rs11,000 crore on a net basis during this period. Having burnt their fingers in the market meltdown of 2008, they are wary of the markets, leading to their limited participation on the bourses. They have been booking profit on every rise, so as not to be caught off-guard if the markets plunge again.
As per data from BSE, retail investors have net sold stocks worth Rs11,776 crore between October 2009 and September 2010.
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[…] Record Foreign Inflows have been invested into India mostly into the booming Stock Market even as Indian Retail investors have fled.The dichotomy is perhaps explained by the problems faced by people on the ground who have a better […]