Trade winds
THE WEEK|August 23, 2020
Indians are falling in love with the equity markets. As in every relationship, they must keep their eyes open
NACHIKET KELKAR

SAURABH ARORA always invested in real estate. He had tried trading stocks, but burnt his fingers during the 2008 financial crisis and had stayed away ever since. The Delhiite, however, recently started buying blue chip stocks. At a time when the economy has taken a knock from the Covid-19 pandemic, what made Arora take the plunge once again?

“I have followed stock markets for some time and done a lot of reading,” he said. “Now I am buying stocks that I am confident will ride the crisis and do well in the long term.”

Some 500km away from Delhi, in Kota, Rajasthan, medical practitioner M.S. Suri, 65, also has been learning the tricks of the trade in equity investing. At an age when most people would be content with bank deposits or debt funds, Suri is waiting patiently for the markets to correct themselves and then buy again. “Earlier, I was also a conservative investor,” he said. “But now I have changed the strategy after I got in touch with financial advisers. Buying stocks has become a hobby for me. I sold some recently, and I am now waiting for a correction so that I can re-enter and invest in pharmaceuticals, an area I understand well, as well as consumer goods and good quality infrastructure companies.”

Typically traditional investors, Indians always considered equity markets risky, and therefore parked their money in bank deposits or other fixed interest bearing instruments like small savings certificates and public provident fund. Buying real estate and gold were other preferred avenues.

That, however, is changing, as many of them have woken up in the past few years to the advantages of systematically investing in mutual funds. Now they are venturing into the capital market and buying stocks. The number of people opening demat accounts and starting trading in equity has steadily been growing. That number jumped a few notches up since the stocks crashed in March and the pandemic forced people to stay at home.

The average daily turnover of stock exchanges in June was ₹61,395 crore, a 69 per cent jump from the average daily turnover of ₹36,432 crore recorded in the year that ended in March 2020.

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