Foreign institutional investors (FIIs) have net sold Rs 96,000 crore worth of Indian equities so far in 2022. However, strong participation from domestic investors – institutional and retail investors – is holding up the market levels. Domestic institutional investors have bought Rs 1 lakh crore worth of equity assets in the same period.
To be sure, stock market levels have fluctuated sharply during this period. Up until March, the market benchmark S&P BSE SENSEX had corrected by ten percent, but it has now recovered to being marginally negative for the year.
The economic recovery has been strong as government has been gradually lifting restrictions, laid down after Covid-19 outbreak.
However, global headwinds have led to uncertainty. The ongoing Russia-Ukraine war has pushed up prices of crude oil and other commodities. As a result, inflation has picked up, adding to the list of concerns. The last print of CPI inflation for February was at eight-month high at 6.07 percent.
If US Fed undertakes more rate hikes, it might lead to more FII selling in India and other emerging markets, and also force Reserve Bank of India to increase rates.
But, should investors look at this volatility as an opportunity to add to their equity exposure at lower valuations, or wait and watch. Axis Mutual Fund, which is known for its growth style of investing, recently launched a value fund. What makes this fund different than other value funds, and how can it complement an investor’s overall portfolio.
In today’s (April 7) episode of Simply Save Podcast, Jinesh Gopani, head-equities, Axis Mutual Fund, speaks with Moneycontrol's Jash Kriplani to take up some of the questions on investors' minds and says that they are closely watching how crude oil prices move as it can have a big influence on economy and stock markets. He talks on what investors should do with their equity investments in the current environment and the top-three sectors that he is bullish on right now.
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