The latest data on ownership of Nifty 500 index companies shows that individual investors, who are not promoters, own 8.7% of the total market cap of over 400 lakh crore. In addition, domestic mutual funds now own 9.6% of that value. While direct individual ownership has remained the same over the past three years, the data shows an increase in the ownership of mutual funds in the Nifty 500. That shows that you directly and indirectly control a sizeable chunk of the equities market.
The rising inflows in the systematic investment plans (SIPS) pushed by mutual funds create a cushion for share prices. The money designated for equity markets will be invested based on the valuation parameters. Active managers can hold back putting in the money if valuations are too high. But not for long. They must eventually deploy it. That ensures that you will have mutual funds or local investors picking up equity shares at every sharp fall in equity markets due to a global selloff.
If you are not familiar with the world of finance, it would be hard for you to connect the dots. You can imagine that even someone who comprehends English cannot quickly understand all the information.
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