Stock Market: Equity Eagles Sight Onset of Bear Phase
Equity market. Image credit X.com
Bears Taste Blood Amit Stock Market Routs
By S Jha
New Delhi, January 24: Equity investors have been disappointed with lack of excitement in the stock market for the upcoming Union Budget. Stock market veterans claim that the Indian stock market has already entered the bear market.
Relentless selling by the foreign institutional investors (FIIs) has soured the market sentiments. Equity investors are sharing data of the net FII selling in the stock market on daily basis, which is coming in astounding figures — ₹4,000 crore and more on a daily basis.
The FIIs sold a net of ₹5463 crores on Thursday. They have withdrawn almost ₹50,000 crores in the ongoing January month from the Indian stock markets.
Slowing GDP Growth, Falling Rupee Worry Stock Market Investors
“I believe this is a pure bear market. I have been switching my portfolio to safe (evergreen) sectors in undervalued stocks from the last few months,” wrote an equity market veteran in a WhatsApp group.
He further stated that he “already sold most of the overvalued/hyped or hope stocks in my portfolio”. Equity eagles use the term hope stocks for shares of companies which they believe can become multibaggers.
“I have reduced exposure to the solar sector drastically, only having (holding) leaders. …highest exposure in healthcare, pharma, IT followed by EMS, transmission line EPC, shipping infra and water EPC stocks,” added the equity veteran while giving glimpses of his equity portfolio rejig.
Conventionally, IT and pharma along with FMCG are known to be defensive bets for the equity market participants. But the ongoing equity market meltdown has not spared even the defensive stocks as they too have corrected heavily.
“Theory is that… the onset of big bear markets lead in fall (in stock markets) is taken (corrections) by leaders of bull market. Then there is (a) massive fall in the general market,” added another equity market veteran with decades of equity market participation experience.
He, however, said that new stocks may emerge “leaders of the next bull market”. The global bull markets went on frenzied expansion after the recovery from the Coronavirus pandemic. Indian stock markets saw at least three years of bull phase.
“When FII sells, DIIs (domestic institutional investors) buy; when DIIs sell, retailers buy; and now even retailers are selling,” said another equity market veteran.
Investors are also taking grim note of falling rupee and prospects of the external commercial borrowings of India Inc becoming a new challenge. They are also debating brokerages sounding alarm over the US bourses outperforming the emerging markets, which may further entice the FIIs selling Indian equities.
Disclaimer: This article makes no recommendation for buy or sell of shares of any company)
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