Do it yourself

As promised yesterday, my technical view of Indian equities is as follows. The readers need to note that I am just an armature student of stocks markets and not a professional technical or fundamental analyst. The following view is based on the combination of technical studies I often used for determining my entry and exit points. This analysis is also one of the parameter in review of my asset allocation strategy; though it does not carry any significant weight in this exercise. General Overall I believe that the up move that started from the panic bottom of 7610 (Nifty closing) recorded on 23 March 2020, could continue for few more weeks. In this up move, broader markets have materially outperformed the benchmark indices. In this up move The Nifty Small Cap 100 index has gained ~75%, while Nifty 50 (+52%) and Nifty Midcap 100 (+57%) have lagged. The market breadth has accordingly been significantly positive. As the up move enters its last phase in next 2-4 weeks, the trend ma...

Continuing from yesterday (see De-institutionalization of household savings ) It is important to note that investors moving away from passive investing to active investing is not an India specific phenomenon; rather it is a global shift. For example, there is massive outflow of funds from equity mutual funds in US, while benchmark indices have been scaling new highs. This outflow of funds has coincided with the tremendous rise in "Robinhood" investors - people buying and selling stocks directly on discount brokerage platforms. As Sanjay Satapahty, a fund manager at Ampersand Capital, highlights "Trend of ETF was a megatrend over last decade and the reversal can have huge implications." ( see here ) In past five months we have seen some glimpses of the likely implications for the market, should the shift from passive investing to active investing sustains over a longer period. Since the market bottom in March 2020, the small cap...

For two years 2017 and 2018, the growth in Indian stock market was mostly attributed to the institutionalization of household financial savings, as investors increasingly turned to the professional fund managers for managing their money. The asset under management of mutual funds, portfolio managers, pension managers, ULIPs etc grew at highest rate. The regulators also supported the fancy campaign "Mutual Fund Sahi Hai!" Net inflows in domestic mutual funds quickly reached from sub Rs5000cr during summer of 2016 to Rs.20,000cr in autumn of 2017. The contribution through systematic investment plans (SIP) increased from Rs3000cr in April 2016 to over Rs8000cr by end 2018. The total asset under management of equity mutual funds had increased from ~Rs5trn in early 2017 to over Rs10trn by August 2018. In July 2020, the net inflows in mutual funds were negative.   The Economics Times, recently conducted a survey of investors to analyze the trend. The survey discovered th...