A continuous flow of money from retail investors into domestic mutual funds through systematic investment plans (SIPs) helped domestic institutional investors (DIIs) cushion a bigger fall in domestic equity in Samvat 2075.In last one year since last Diwali, DIIs poured in a net Rs 53,000 crore into the domestic stock.
They were net sellers in just three of last 12 months.Foreign institutional investors (FIIs) invested a net of Rs 69,000 crore in the 12-month period, but they put in most of it before March.
In this financial year, FIIs have bought stocks worth Rs 13,000 crore against DIIs Rs 64,000 crore.Domestic investors buy stocks when they get flows.
What would a mutual fund guy do if he gets inflows? He has to buy, he cant sit on it.
But what I have seen is that DIIs have been using a counter-cyclical approach.
After March FIIs kept selling consistently but all the selling was absorbed by the DIIs, said Amit Jeswani of Founder - CIO at Stallion Asset.DII activity was most prominent in July and August, when they invested a net of Rs 41,000 crore.
This was the time FIIs were on a selling spree as the government proposed an enhanced income-tax surcharge on capital gains.
FIIs withdrew a net of Rs 30,000 crore in these two months.Since last Diwali, asset under management of equity mutual funds surged from Rs 6.59 lakh crore to Rs 7.24 lakh crore, a growth of nearly 10 per cent, AMFI data showed.SIP inflows have been the backbone of the mutual fund industry lately, and market experts recognise the importance of this steady flow of funds.
A positive sign is that inflows through SIPs continued on a strong footing.
Despite near-term volatility, the long-term potential of Indian economy remains intact.
We continue to be constructive on equities and, hence, we see value in increasing allocation to equities in a staggered manner to even out market volatility, said Nimesh Chandan, Head of Equity Investment at Canara Robeco AMC.In September, SIP inflows stood at Rs 8,262.94 crore, up from Rs 8,231 crore in August, latest AMFI data showed.
Equity funds, however, received a net of Rs 6,609 crore, which was down 28 per cent month-on-month at a four-month low.10 major events that shook - moved Indian equity market in Samvat 2075Samvat 2075 25 Oct, 2019Samvat 2075 was full of drama as it saw the general election, a tussle between RBI and govt, slowing economic growth, several debt defaults, a crippling liquidity crunch and a massive corporate tax cut.
Modis victory25 Oct, 2019General elections in May were perhaps the biggest event of Samvat 2075.
The Narendra Modi-led Bharatiya Janata Party (BJP) won the election, clearing the path for him to become the Prime Minister for a second time.
On May 20, the first market session after the exit polls, Sensex jumped 3.75 per cent, or 1,422 points, amid signals of a clear majority for Modi.
However, on the result day, i.e.
May 23, when the win was confirmed, Indian equity market saw profit booking and Sensex shed 0.76 per cent.Corporate tax rate cut25 Oct, 2019Certainly among the most important events of the Samvat, on September 20, Finance Minister Nirmala Sitharaman announced to reduce corporate tax rates to an effective 25.17 per cent propelling the stock markets.
Sensex and Nifty about 3000 and 1000 points within two sessions.
The step would cost the government Rs 1.45 lakh crore in revenues.
RBI windfall to govt25 Oct, 2019After a long tussle and a resignation of a RBI governor over the issue, the Reserve Bank of India accepted the recommendations of Bimal Jalan committee and agreed to transfer Rs 1.76 lakh crore for 2018-19 from its reserves.Both parties were fighting over the level of reserves that RBI was supposed to keep for contingencies.
Crisis in NBFC25 Oct, 2019A debt default by IL-FS last year triggered an avalanche that crippled the entire NBFC space, triggering a liquidity crunch that caused much distress among a number of players.
Many companies defaulted on their debt obligations, the biggest being DHFL and Altico.
The DHFL stock constantly hit lower circuit limits and traded at RS 21.30 on Thursday against its last September price of Rs 670.
Analysts do not find the dip troubling.
It is difficult to put a specific reason to a very short-term trend.
The equity market tends to be volatile and this volatility does have an impact on investor behaviour and sentiment.
Net inflows to equity funds for a particular month depend on various factors, said Chandan.Jeswani expects consumer-facing businesses to outperform in the next one year.
He is particularly bullish on consumer financials, consumer pharma and consumer technology sectors.Canara Robeco sees growth in private sector banks, as NPAs have peaked.
It expects industrials, domestic pharmaceuticals and consumer discretionary sectors to outperform.After the recent correction in the smallcap and midcap stocks, we feel quality companies with good business models, competent managements and fair valuations would be the next big gainers, said Chandan.Corporate governance has been an issue with many companies lately and the market has punished those stocks.
Jeswani feels it is important to have high corporate ethics to succeed in the current bull run.I call this bull market a Swachh Bharat bull market.
Companies which show good corporate governance practices, even if they go through a weak business cycle for 1-2 quarters, will do well.
For example Titan is going through a tough phase, but the market is not ready to beat that stock down, he said.50 stock picks from top brokerages for Samvat 2076Samvat 207523 Oct, 2019Samvat 2075 comes to an end, and a new Samvat kicks off on Diwali this Sunday, October 27.
In the Samvat year gone by, Nifty generated 10.8% return and Sensex 9.8%, but that growth was limited to a handful of stocks.
This is why most investors equity portfolio bled to make Samvat 2075 a forgettable year.
Samvat 2075 was tough for investors, as stock performance remained concentrated in specific pockets.Interesting Samvat Year Ahead23 Oct, 2019Since we have already gone through a significant downturn, midcaps have corrected 35-50 per cent and the way interest rates have moved, the next Samvat will be interesting in terms of money-making ideas, said Abhimanyu Sofat, Head of Research, IIFL.
Like every year, top brokerages have named their top stock ideas for Muhurat trading this Diwali.
ICICI Bank | Current Price Rs 455 | Target Price Rs 505 23 Oct, 2019Several brokerages have had ICICI Bank among their top picks for Samvat 2076.
Axis Securities has a price target of Rs 492, as it expects the bank to remain adequately capitalised for growth despite various challenges.
IIFL Securities expects it to reach Rs 505 in next 12 months, driven by growth in its retail portfolio.
Motilal Oswal and Sharekhan have also recommended the stock to investors.L-T | Current Price Rs 1,430 | Target Price Rs 1,87523 Oct, 2019IIFL Securities has a price target at Rs 1,875 on the stock, as it finds the company well placed to leverage the uptick in the investment cycle.
Karvy Stock Broking, Kotak Securities and Motilal Oswal are also bullish on the stock, and have included it among their stock picks for next one year.
SBI Life | Current Price Rs 984 | Target Price Rs 96523 Oct, 2019HDFC Securities has a buy recommendation on this stock and advises add on dips for a target price of Rs 965.
Given the untapped distribution reach, tailwinds from financialisation of savings, improving protection share, lowest operating cost ratios and improving margins, the stock looks favourably poised.
Axis Securities also has a buy recommendation on it and expects the scrip to hit Rs 936 mark by next Diwali.