Equity slump more technical than macro: Jefferies report

THE ONGOING SELL-OFF in Indian equities is primarily technical in nature, reflecting multiple compression rather than any drastic macro issues, according to Jefferies' latest 'GREED & fear' report.

- ANANYA GROVER

It noted that a major driver of the sell-off has been aggressive foreign selling. The report pointed out that foreigners have sold a net $12.2 billion worth of Indian stocks so far this year, after selling a net $12.3 billion only in the fourth quarter of 2024. But as foreigners sell, domestic flows into equity mutual funds have so far held up to a remarkable extent.

"For now there is confidence amongst mutual fund companies that these flows will continue since most are based on monthly installment SIP schemes," it said, adding that the risk of outflows will grow when small to mid-cap funds start to show a YoY (year-on-year) loss, which it expects in about three months.