The Indian equity market has exhibited extraordinary steadiness amidst global volatility, setting it apart from its international counterparts. This resilience becomes evident when analysing the drawdown figures. It showcases the Indian equity market’s superior performance compared to several others in the period spanning the last two years until June 2023. Notably, the BSE Sensex, representing the Indian equity index, outshines its peers by experiencing a relatively limited maximum drawdown of only -16.85 per cent.
This remarkable achievement demonstrates the Sensex’s ability to maintain its resilience even during challenging market conditions. In stark contrast, other prominent indices like the Hang Seng index (-47.02 per cent), Nasdaq Composite (-36.40 per cent) and DAX 30 (-26.40 per cent) endured more substantial drawdown. The BSE Sensex’s remarkable capacity to mitigate losses emphasises its superior performance and underscores its strength in navigating market downturns.
One of the contributing factors that played a significant role in mitigating the decline of the Indian equity markets was the substantial inflow from domestic institutional investors, including mutual funds. Historically, the Indian equity market has been susceptible to the influence of foreign portfolio investors (FPIs), resulting in increased volatility and fluctuations in investor sentiment. However, the expanding retail investment through mutual funds has emerged as a robust defence mechanism against global factors. In the last few years, retail investors have shown great faith in the equity market and continued investing despite all the short-term volatility witnessed in the domain.
Rise of Retail Equity Investors
Denne historien er fra July 31, 2023-utgaven av Dalal Street Investment Journal.
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Denne historien er fra July 31, 2023-utgaven av Dalal Street Investment Journal.
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