Stock markets are pathologically pragmatic. They see a lot of sun even when dark clouds swirl on the horizon. It is perhaps this inherent positivity that keeps the markets going.
The second Covid wave has phased out and a third wave is feared round the corner, but the markets are looking forward to an impressive earnings growth, despite the mounting uncertainties. The main reason for this market dynamics stems from the fact that investors are rushing inexorably for equities in the absence of high-yielding investment avenues and a low-interest rate regime. Stocks are known to beat inflationary pressures.
India VIX, a volatility index based on the Nifty index option prices, has fallen from its highs of 80 in early 2020s to as low as 15. It indicates a receding fear among investors. Similar trend of one-way growth has been seen in the small-cap and midcap space since April last year.
More than a year later, investors wonder if the small-cap and mid-cap space is still left with some fire in it.
“These small and mid-cap stocks were pressured for long. There was scanty growth. But the picture has changed now. Cost-cutting measures adopted by these companies during the pandemic pushed their bottomlines up,” points out S Ranganathan, Head of Research at LKP Securities. “Markets are poised to scale new highs. The broader markets will continue to outperform the benchmark Nifty and Sensex.”
Direct exposure to equities increased several times as more and more people began trying their luck in the stock market in search of a parallel income. The need for additional financial assistance precipitated more severely in the aftermath of the Corona-induced lockdowns when job losses and pay cuts became normal. This was evident in the spurt of new dematerialisation accounts from smaller cities over the last 15 months.
According to data released by markets regulator Securities and Exchange Board of India (Sebi), new demat account additions scaled a record high of 10.7 million between April 2020 and January 2021. This was more than double the 4.7 million new accounts opened in 2020-21.
Most of these new accounts have gone to Central Depository Services (India) Ltd, one of the two depositories promoted by the Bombay Stock Exchange (BSE). The BSE stock zoomed on the back of an increase in income and also because of its hefty stake in CDSL. The other depository, the National Stock Exchange (NSE)promoted NSDL, has also garnered an increasingly bigger slice of the market pie. It will grow further as NSE gears up to go public with a market capitalisation (M-Cap) of ₹50,000 crore.
The pipeline of public issues is quite long and strong, which will test the appetite of these new investors. The next two-three quarters will see a deluge of public issues from start-ups backed by private equity players, and central PSUs like LIC of India in the second half of this fiscal.
Mobile wallet company Paytm is planning to float the country’s biggest initial public offering (IPO) of ₹12,000 crore. The news sent the Paytm share to ₹35,000 apiece in the grey market. Some more start-ups like Zomato and Pharm Easy also have plans to tap the market.
Continue reading your story on the app
Continue reading your story in the magazine
It's Friday Night Fallacy
Actor Shreyas Talpade doesn’t want to retire and wants to save money for securing happiness
March to Your Goal, Unhindered
Keeping your financial aspirations flexible and adaptable to shifting circumstances is key to building a fortune
Increasing the Awareness of Quant Funds
Anil Ghelani, Head of Passive Investments & Products DSP Investment Managers talks about the rise of quant funds and winning strategies employed by fund managers. Deepika Asthana, Moderator, Market Expert, moderated the webinar - Master Talk - Rise of Quant Funds - Alt Data, Sentiment, and Predictive Analysis jointly organised by Outlook Money and Refinitiv. Excerpts from the proceedings:
Herculean Power of Narration
Chronicles, stories are an imperative part of our existence. They make us cognizant about our past, present and help us pave our road ahead. And finance or investment is very much a part of it. There you need to combine data with the story and look beyond the sales spiel
AXIS AMC: REVOLUTIONIZING ASSET MANAGEMENT FOR LONG-TERM WEALTH CREATION
The Indian financial markets have seen growth like no other. Since the era of the open outcry system, a lot has changed for the markets. We have witnessed a sea of changes in the way Indians access markets, the way markets are regulated, and even the offerings available to investors. There has been widespread disruption and innovation across the entire value chain of investing.
Bridging The Gap
As Covid leaves a yawning gulf between income and expenditure, digital payments spring up to woo buyers with ‘Buy Now Pay Later’ schemes
Education in New Normal Age
Change is the only constant. And as the world embraces this phrase amidst the pandemic, the education sector in India, which is digitally divided, has a long way to go before
Embarking On The Journey Towards Financial Independence
Othe eve of Independence Day, Aditya Birla Sun Life Mutual Fund, in association with Outlook Money, held a webinar in August to celebrate the journey towards financial independence and to help people plan for this journey and embark upon it.
REDEFINING THE INSURANCE INDUSTRY
Tapan Singhel MD & CEO, Bajaj Allianz General Insurance Co. LtdQ
‘Use Digital Transformation to Find Your Own Goal'
Swarup Mohanty CEO, Mirae Asset Investment Managers India Pvt.Ltd speaks on changes that occurred in asset management after the entry of digitalisation and how it spiked up during the last two years. Harish Toshniwal Customer Success lead - Investment Solutions South Asia, Refinitiv moderated the webinar – Master talk: Digital Transformation in Asset Management: Role of Technology in Harnessing Data, jointly organised by Outlook Money and Refinitiv. Excerpts from the proceedings:
TV PROFIT LEMONIS SQUEEZED!
70 companies sue reality guru for robbing them blind
MONACO PRINCESS FIGHTING FOR LIFE!
Charlene rushed to hospital as $500M divorce explodes
SWAMP KING DIES AS GATOR STORMS SHED!
Loses arm in ambush during raging flood
KALEY'S CURSE STRIKES AGAIN!
Unlucky in love cutie’s marriage down in flames
HISTORY HAUNTS HARRY & MEGHAN
Duke & Duchess of Sussex doomed to become exiles Edward and Wallis
FOR HARRY & MEGHAN CHARITY BEGINS AT HOME!
DO-AS-WE-SAY, not-as-we-do hypocrites Harry and Meghan are desperate to brand themselves as a caring couple devoted to inspiring regular folks to improve their lives, but evidence keeps piling up they’re just selfish, arrogant piggies!
COURTNEY'S FACE RUINED!
Freaky Friends star in nip/tuck drama
CELINE'S COMEBACK KISSER!
Diva Dion defies Father Time for Sin City return
GEORGE PETERSON'S BACK – TO WIN THIS TIME!
Da Bull Is All Done With Third Place at the Olympia
BRAD'S LAST STAND!
His back’s to wall as Angelina wins key custody fight