Over the past few months, there has been a significant decline in key equity indices, with the Nifty50 experiencing a sharp drop of around 2,000 points from its peak of 18,887 in December '22. On 16th March, the index fell below the 17,000-mark, marking its lowest point since 13th October last year. The decline in the market has been largely attributed to the selling pressure exerted by Foreign Portfolio Investors (FPIs), who have sold $4.3 billion of Indian equities in the first two months of 2023. In contrast, domestic investors have stepped in as buyers to try and offset the selling pressure.
The recent market volatility has caused many investors to be swayed by short-term fluctuations and the numerous variables that can impact the market. These variables include the decline of banks in the US, ongoing geopolitical tensions, the possibility of a global economic recession, expectations of higher interest rates in the US, and the impact of the Adani-Hindenburg saga, among other news developments. Additionally, high domestic interest rates have also been a factor in the recent market trends.
These variables indeed paint a scary picture. Volatility in the market and erosion in notional wealth can shake a naive investor's faith in equity as an asset class. But is not volatility the second nature of markets? Should one get carried away by the recent volatility and resort to selling their holdings?
The variables certainly present a concerning scenario. Market volatility and erosion of notional wealth can easily rattle the faith of a novice investor in equity as an asset class. However, it is key to remember that volatility is inherent in markets. So, should we be swayed by recent fluctuations and hastily resort to selling our holdings?
Bu hikaye Beyond Market dergisinin March 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Beyond Market dergisinin March 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Giriş Yap
Young Or Old? Find Your Ideal Health Plan
Age doesn't define you: find your ideal health coverage at any stage! Choose individual or family plans that fit your needs
IMPORTANT JARGON
The phase-wise voting in India for general elections began on 19th April.
BACK IN BUSINESS
Buoyed by post-pandemic travel trends and rising disposable incomes, India's hotel industry is expected to maintain its growth momentum, going forward
SCOOPING UP SUCCESS
Investments are hot, but innovation and competition are the next scoops to conquer for ice cream companies
DIG DEEPER
Investors chasing high-growth should prioritize near-term EPS explosion to justify high PE ratios, but also verify long-term business health and management before taking the plunge
SOARING AMBITIONS
Bolstered by cost advantages and government support, India's Electronics Manufacturing Services industry sets its sights on a $100 billion slice of the global market by 2026
TARGET IN SIGHT
Government policies and private sector involvement have propelled India's defence exports to new heights, putting the seemingly ambitious $5 billion target firmly within reach
PLAYING THE LONG GAME
Small and mid-cap surge in India raises regulatory concerns, but long-term investors with risk strategies may benefit from these volatile stocks given positive economic and interest rate forecasts
MAGNIFIED PRESSURE
While the asset quality of banks is anticipated to remain largely stable, challenges persist in the form of mobilizing deposits and peaking profitability
OPPORTUNITY KNOCKS, BUT CHALLENGES AWAIT
INDIA'S BOOMING PE MARKET ATTRACTS INVESTMENTS IN CONSUMER AND INFRASTRUCTURE, BUT CHALLENGES LOOM. CAN FIRMS PRIORITIZE VALUE CREATION TO NAVIGATE THE RISKS?