The massive crash in stock indices BSE Sensex and NSE Nifty 50 post the unexpected Lok Sabha election results where the Bharatiya Janata Party (BJP) fell short of a majority did not trigger panic among retail investors, mutual fund distributors said.
Positive factors such as the Reserve Bank of India’s upward revision of GDP forecast, declining crude oil prices, increased GSP collection, the European Central Bank’s rate cut, and the progression of monsoon rainfall collectively bolstered investor confidence.
Instead, they wanted to know if this was the right time to increase their allocation to equities, they said.
“Our retail clients wanted to know if they should buy on today’s fall in the markets. Calls from investors who were worried about markets tanking further were negligible,” said Amol Joshi, Founder, Plan Rupee Investment Services.
Having a long-term investment strategy in place appears to have played a role in keeping the nerves in check. “Most of my clients are long-term investors. Those who were sitting on cash, had the time horizon and risk appetite saw this as a buying opportunity. Nobody panicked or pulled out their holdings,” said Rushabh Desai, Founder, Rupee with Rushabh Investment Services.
Deepak Chhabria, Chief Executive Officer and Director, Axiom Financial Services echoed the view. “There has been no reaction at all from our clients. Over last few months, we had been cautious and had done some profit booking. Though there were a few calls enquiring about re-entry into the markets (at these levels), we are in a wait and watch mode as of now.”