Skip to main content

Midcaps will hurt you more, Rs 1,00,000 crore already gone

Stock market corrections are always painful. It is more so in the middle and lower end of the market. Corrections are also considered part and parcel of a bull market. But wait! It’s not that simple for investors in midcap and smallcap stocks. Strong retail participation in recent times changed the contours of the domestic market in such a way that a major plunge the midcap stocks at this stage could leave investors high and dry, and how! 

Midcaps being the playground for retail investors and domestic mutual funds, they have limited cushion in the case of a sharp fall, compared with their largecap peers, which can have a much bigger backup from overseas portfolio investors as well as big domestic institutions. 

“If we leave out the $2 billion market-cap companies, total market-cap of midcap and smallcap stocks has risen to Rs 28,00,000 crore till last week, which was a historical high. In the event of even a small corr .. 

One per cent of Rs 28 lakh crore equals Rs 28,000 crore, and a five per cent Rs 1,40,000 crore. This is much higher than the Rs 53,000-odd crore investment that mutual funds have made in equities in the first seven months of this calendar. 

Monthly inflows to equities from domestic mutual funds have averaged at Rs 7,600 crore this calendar. Indian fund houses see around Rs 4,700 crore new investment in equity through the SIP route every month. That’s a good representation of retail p .. 

Equity-oriented schemes account for 63 per cent of individual investors’ mutual fund assets, shows Amfi data. And a large chunk of this money remains invested in midcap stocks. 


Comments

Post a Comment

Popular posts from this blog

Wizard of Dalal Street: Govind Parikh's investment mantra

Wizard of Dalal Street: Govind Parikh's investment mantra Govind Parikh of Govind Parikh Securities says selling right is more important than correct buying. He says it is necessary to keep a lot of cash. "We keep an average 10 percent cash in our portfolio," he says I like to buy things in a bad market. Additionally, don't look current cash flow, concentrate on future cash flows — that is what  I look at," says Govind Parikh of Govind Parikh Securities. He advises investors to buy good quality stocks when the market crashes. While sharing his investment philosophy with ace investor Ramesh Damani, on the Wizards of Dalal Street, Parikh says management integrity is very important when deciding which stock to bet on. He tells investors not to buy stocks impulsively. According to him, selling right is more important than correct buying. He says it is necessary to keep a lot of cash. "We keep an average 10 percent cash in our portfolio," he says. He al...
2 comments
Read more
LIC IPO Shorts  The largest market capitalization in the making. The govt selling 5 percent stake...... The cuttoff price 2100 Listing price 3000 or more shall be included in the nifty Pro Large base of policies Large Market Share Cons Decling market share viz viz private companies higher cost insurance policies Bottom line can apply for LIC IPO for listing gains..... For More do have a look at the Link Below https://www.youtube.com/watch?v=VPGp5V1ecDM  
Post a Comment
Read more
  NASDAQ's Crack Will Rattle Global Equities During the week, the confidence of the bulls got shattered when tech-focused US companies crashed rattling the entire financial markets. Nasdaq's crash does not look like a normal correction but seems like a bigger downward spiral unfolding after valuations sky-rocketed. Given that US elections are only 52 days away, it seems unlikely that US markets will make fresh highs again and there is every likelihood that selling pressure may continue even in broader markets. Crude oil too has given up most of its gains and prices are below USD 40 per barrel on expectations of lower demand going ahead which suggests that global recovery might take longer than earlier anticipated. In contrast surprisingly, gold's move is not hinting at any major crash in the financial markets, given that gold prices consolidated and remained steady even when Nasdaq plummeted. One of the important ways to analyze the psyche of an investor is by measuring mut...
Post a Comment
Read more