Driven by a pandemic-fueled retail investing boom, Indian stocks were the world’s best performers between early 2020 and October 2021. Thereafter, rising concerns about aggressive rate hikes by the Federal Reserve caused foreign investors to withdraw a record $33 billion from local shares in the nine months through June.
Overseas funds have returned strongly this quarter, pumping $7.6 billion and supercharging the market. The Sensex is now less than 5% away from an all-time high reached in October.
“The resilience of the domestic market even in the context of strong global headwinds is a bit surprising. Clearly, India is outperforming the rest of the world. While the S&P 500 is down 18% this year, Nifty is up by 1.8%. Retail investor enthusiasm - directly and through SIPs in mutual funds - has supported the market successfully shielding it from the onslaught of sustained FPI selling from October 2021 through June 2022. In this context, the total demat accounts in India crossing the 10 crore mark in August is indeed, a proud landmark," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He has an advice for retail investors directly investing in stocks. "Retail investors directly investing in the market should not commit the mistake of chasing low-grade cheap stocks. High quality large-caps will outperform when the market turns weak. Presently, the market is driven by momentum and bulls are in control," he added.
CDSL is currently the largest depository in the country in terms of active demat accounts. Nehal Vora, MD & CEO of CDSL stated: “We are delighted to see that investors across various states and union territories are now contributing to India’s growth story. "
