Investment horizon: Cues for the investors.
The stock markets still continue to be quite vibrant, highly volatile, and bullish in the undercurrent. The reasons could be many but the fact remains that despite the volatility and risk factors the investors are indeed thronging the market given the poor rate of interest being offered by Banks and other FIs. Today GOI has reduced the interest rate on PPF accounts which is going to impact the investors particularly the taxpaying citizens. Inflation is gaining momentum making the value of money on hand and in Bankless valuable. And rightly so the Depository participants CDSL and NSDL find that the investors are queuing up to open D Mat accounts which indicates that the investing public slowly is entering the stock and commodity markets with a view to earning reasonable returns. So for the investors who are cats on the wall have to take the cue from here and enter the markets with some percentage of their investible funds say 20- 30 % of their savings in this market in safe counters (which have proven track records) for better returns in the medium and long term horizon.
Another important development that is seen quite positive by the investors is that the economy is fast returning to normal after the disastrous pandemic impact and the rating agencies predict the GDP to be quite impressive in the years to come. The tax collections are also improving. The consumption and expenditure of the Government are also scaling up. Auto, I.T, Logistics, Banking sectors are also catching up fast. Mutual funds are showing better NAVs and investing heavily in the markets. The FPIs are doing a lot of research in the markets before choosing Indian markets and the counters and they find Indian stock markets have great potential. So also DIIs like MFs.
FPIs pump Rs 2.75 lakh crore in Indian equities in FY21, highest ever in two decades
The foreign portfolio investors (FPI) have pumped in more than Rs 2.75 lakh crore ($37 billion) in the Indian equity market during FY2020-2021. This is the highest ever investment by foreign investors into Indian equities in the last two decades.
As per the data available on National Securities Depository Ltd (NSDL), such huge FPI inflows in Indian equities were in 2012-13 at Rs 1.40 lakh crore, followed by Rs 1.11 lakh crore in 2014-15 and almost the same amount in 2009-10 and 2010-11. In the US dollar term, the country received over $20 billion FII inflows in fiscal 2009-10, 2010-11 and 2012-13. Meanwhile, the domestic institutional investors (DII) have remained net sellers during fiscal 2021. DIIs have sold around Rs 1.38 lakh crore in Indian equities this fiscal.
So there is every reason to be optimistic to invest in Indian stock markets right now-whether directly or through MFs.
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