Do retail investors indulge in cherry picking?

October Data

Retail investors bought equities for Rs 1,843.69 cr

FIIs have sold equities for Rs 16,890 crore

Though the highly volatile markets scare the retail investors away, they do seem to be picking up shares at low levels.

Retail investors have been net buyers of equity for Rs 1,843.69 crore so far this month, according to the data from the BSE. In Tuesday’s Muhurat trading too, they were net buyers by Rs 8.25 crore.

Buying


Despite the markets tanking on Friday and Monday, retail investors have been buying. On Monday, they were net buyers for Rs 55.29 crore and on Friday by Rs 330.77 crore.

In Muhurat trading, considered an auspicious time to buy, individual investors made a token purchase. But this cannot be construed as a trend, said an analyst.

For those who can afford to stay invested for two to three years, sources said, some shares are now trading at attractive level.

‘Buy large-cap’


A senior equity advisor with a stock broking firm said that he is advising clients to invest in select large caps rather than putting it in mid- and small-cap stocks. When the markets start their upward journey, the large caps will gain more than the mid- and small-cap stocks. Large-caps are far more liquid than the smaller stocks.

The domestic institutions have also been net buyers so far this month for Rs 10,912.43 crore. In the last three trading sessions, they bought equities worth Rs 1,455.22 crore.

Speaking to Business Line, Mr C.J. George, Managing Director of Geojit Financial Services, said retail investors are seen buying in small quantities. Unlike in the past market meltdowns, retail investors are not that panicky.

FII dumping continues


They realise that the market fell as foreign institutional investors started dumping stocks to meet their needs back home.

FIIs, who have been in a savage selling spree for quite sometime now, sold a net Rs 69 crore even in the one-hour Muhurat trading on Tuesday.

So far this month, FIIs have been net sellers for Rs 16,890 crore, bringing their total net sales to $12.65 billion this year.

Source: TheHinduBusinessLine