Express View on Sensex highs: Surge and risk

Ahe benchmark indices are scaling caller heights — connected Tuesday, the BSE Sensex surpassed the 85,000 people during trading, but ended the time lower. On Wednesday, the scale closed astatine 85,169. Since the opening of this year, the Sensex is up astir 18 per cent. The archetypal nationalist offerings marketplace has besides been robust. As per the Economic Survey, the fig of IPOs has risen from 164 successful 2022-23 to 272 successful 2023-24. And the momentum continues with respective large companies tapping the markets. Alongside this surge successful markets, the capitalist basal continues to summation sharply. According to the Economic Survey, the fig of retail investors has risen to implicit 9.5 crore, and determination are much than 4 crore communal money investors successful the country. In August, determination were 9.61 crore SIP accounts. Foreign investors person besides turned affirmative successful caller months. After outflows successful April and May, overseas portfolio investors person pumped successful money. In the fiscal twelvemonth truthful far, nett investments by FPIs adhd up to Rs 81,451 crore. The US Fed cutting involvement rates, and providing greater clarity connected the trajectory of involvement rates, has besides influenced investors. However, this euphoria has been accompanied by idiosyncratic investors making riskier investments.

A survey by the stock market regulator shows that the fig of idiosyncratic investors successful the Futures and Options marketplace has astir doubled — from 51.35 lakh successful 2021-22 to 95.75 lakh successful 2023-24. Nine retired of 10 idiosyncratic traders mislaid wealth successful the F&O segment. Yet, a important fig of them continued to trade. The survey estimates that during the past 3 fiscal years, 1.13 crore unsocial idiosyncratic traders mislaid Rs 1.81 lakh crore successful this segment. Of these, much than 1 crore traders mislaid Rs 2 lakh per idiosyncratic connected mean during this period. While these idiosyncratic traders mislaid money, it was the overseas portfolio investors and the proprietary traders who made wealth — profits of the 2 categories added up to Rs 61,000 crore past year. The demographic illustration of these idiosyncratic investors is revealing. The proportionality of young traders, those who are little than 30 years old, has accrued sharply — from 31 per cent successful 2022-23 to 43 per cent successful 2023-24. More than three-fourths of idiosyncratic traders person declared an yearly income of little than Rs 5 lakh. This continuing surge successful F&O trading, particularly by idiosyncratic investors, adjacent arsenic astir of them person been incurring sizeable losses, has been a origin of interest for immoderate time. In July, Sebi had released a consultation insubstantial outlining a bid of measures to interaction trading successful this segment.