January 11, 2020

Behind the bipolar market behaviour

Institutions, led by mutual funds, are sticking to the safety of the top 250 stocks while retreating from the rest of the market

In recent times, India’s bellwether stock indices — the Nifty50 and Sensex30 — have behaved like the proverbial cat with nine lives. Dire events such as US-Iran hostilities, trade wars, India-Pakistan face-offs and the global recession scare, have triggered only shallow corrections in the indices from which they have bounced back smartly. They’ve brushed off fundamental factors such as India’s worsening GDP growth print, repeated earnings misses by India Inc and sky-high valuations, to scale new highs.

The index behaviour has caused much heartburn for domestic investors. Retail investors, the bulk of whose money is parked in the mid- and small-cap segments of the market, have seen their portfolios lose value while the Nifty50 and Sensex30 have notched up double-digit gains.

Read more at https://www.thehindubusinessline.com/opinion/columns/behind-the-bipolar-market-behaviour/article30536141.ece

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