The Indian Stock Markets remained in volatility since the onset of Iran War as the crude oil prices have weighted heavily on the benchmark indices. In the last
month, Sensex lost nearly 3,000 points or 3.8 per cent due to the fluctuations in the West Asia region with fresh escalations pushing up the oil prices. During the same period, Nifty lost 949 points or 3.9 per cent. According to the combined data from NSDL and BSE, since August 10, foreign investors have net bought Indian stocks worth just Rs 2,953 crore. In the month of September, foreign funds have net sold stocks worth about Rs 12,700 crore, reversing the trend of the previous two months. The situation continues to put pressure on the Indian Rupee despite a record $136-billion inflow into India through RBI’s special dollar deposit drive from NRIs.
What factors pulling down the markets?
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited said, "Two strong headwinds are impacting the market now. One, Brent crude around $100 amidst escalating US-Iran tensions is weighing on the economy. Two, the booming IPO market is sucking liquidity out of the market resulting in sustained downtrend in the Nifty. Perhaps, the latter is impacting the market more than the former. The listing gains from IPOs, which has increased to about 22% since June, are driving investors- both retail and institutional- into the IPO market."
On the Foreign Investors, he said even FIIs who have sold equity for Rs 284000 crores through the exchanges so far this year have put in about Rs 36000 crores in IPOs so far this year. Everyone is riding the momentum in the IPO market. This frenzy has pushed up the IPO valuations, too.
IPOs are getting subscribed irrespective of valuations. Investors have to be discrete while applying for IPOs.
There are good and reasonably-priced IPOs. Investors can apply for these. But instead of blindly applying for all IPOs driven by FOMO, investors can now accumulate fairly-valued stocks, particularly large-caps in growth sectors. Investing in these segments and waiting patiently will reward investors handsomely while many IPOs run the risk of going below the issue price. Discretionary is the better part of FOMO.
