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Penny stocks — a magnet for retail investors and big gains amid market turmoil

Penny stocks, casually defined as stocks with a price of less than Rs 10, have been in dreamland compared to the rest of the market.

New Delhi / March 31, 2022 / 12:59 PM IST

Common sense says that stocks in the darkest alleys of the market tend to bleed more than their blue-chip counterparts during market turbulence.

The prospects of a tighter monetary policy abroad, rollback of the extraordinary liquidity provided by central banks and Russia’s invasion of Ukraine have seen benchmark indices give up more than 6 percent of their gains from their record highs hit in October. At one point earlier this month, they had nosedived 15 percent from the highs.

In the six-month period starting October, the average stock on the Nifty 500 index has declined 7 percent. Of the 500 stocks part of the broadest gauge of the Indian market, 345 have seen negative returns, data compiled by Moneycontrol shows.

On the face of it, the pain in the market has been broad and deep.