Since mid-June 2022, equity markets have been on a tear. The Nifty 50 gained almost 16.55 per cent or 2,531.75 points as of August 16, 2022. This is most likely due to a trend reversal in foreign institutional investors’ (FII) investment. Since October 2021, FIIs have been net sellers, selling shares worth ₹3.91 lakh crore. FIIs have purchased shares worth ₹16,218.5 crore since August 2022. Furthermore, there was not a single trading day in a month till August 17, 2022 when FIIs were net sellers. This demonstrates that FIIs have become net purchasers.
Aside from that, even at the macroeconomic level, both the US and Indian inflation appear to have slowed down. This suggests that various central banks will slow their rate hikes. This is anticipated to function as a catalyst for growth in the equity market. Furthermore, equity valuations appear to be sensible, given it trades below the historical mean.
The valuations of Nifty 50 fell dramatically. The Nifty 50 price to earnings (PE) ratio fell from 42 on February 8, 2022 to 18.92 on June 17, 2022. The current market bounce has also helped mutual fund investors. Indeed, individuals who purchased at lower prices had good returns. The table below demonstrates this more clearly.
Esta historia es de la edición August 29, 2022 de Dalal Street Investment Journal.
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Esta historia es de la edición August 29, 2022 de Dalal Street Investment Journal.
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