Sensex Trades Weak; Automobile Stocks Extend Losses

Stock markets in India are presently witnessing selling pressure. The BSE Sensex is trading lower by 243 points and the NSE Nifty is trading lower by 71 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index are trading down by 1% & 0.5% respectively.

Among the sectoral indices, realty stocks and telecom stocks are witnessing buying interest. While metal stocks and automobiles stocks are trading in red.

Indian equities have had a tough time in the past one year. With elections around the corner, volatility in the markets has been on a constant rise.

Till date in FY18-19, foreign investors have pulled out around Rs 515 billion from the Indian equity market.

In the past, such panic would have meant the domestic investor would have followed suit.

That hasn't happened this time.

Domestic investors have shown surprising resiliency to the market's volatility.

The month-wise SIP in FY18-19 has seen a constant rise.

Also, close to 1 million new SIP accounts have been added during FY18-19 according to AMFI.

Rising Retail Participation Even In A Falling Market

The days of knee-jerk panic withdrawals by individual investors are slowly but surely reducing. If they ride out this volatility, they will see the benefit of the cycle turning in their favor.

That will mark a significant change in the mindset of the retail investor for the long term.

Moving on, Indian rupee strengthened against the US dollar today after the Reserve Bank of India's (RBI) surprise repo rate cut and change in its policy stance to 'neutral' from the earlier 'calibrated tightening'.

In RBI's sixth bi-monthly monetary policy review on Thursday, the RBI surprisingly reduced the repo rate by 25 basis points to 6.25%.

Besides, weakening of the US dollar as against other currencies overseas and easing crude prices supported the local unit.

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Disclosure: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...

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