Market crash? Retail investors snap up shares worth nearly Rs 21,200 crore

The market crash on June 4, following the unexpected election verdict, has created a political storm, with the Opposition led by the Congress party alleging huge losses to domestic investors.

Given this backdrop, it is interesting to see how various market participants behaved on Tuesday when the benchmark National Stock Exchange (NSE) Nifty slumped as much as 1,900 points, or 9 per cent, before recouping some losses to end 1,379 points, or 6 per cent, lower at 21,885.

The country’s largest bourse, the NSE, clocked volumes of a record Rs 2.71 trillion in the cash market segment on Tuesday, the election verdict day.

The exchange provides a breakup of this volume with a few days of lag.

 

Data provided by the NSE shows that retail investors were net buyers to the tune of Rs 21,179 crore, while foreign portfolio investors (FPIs) net sold shares worth Rs 12,511 crore.

It essentially means individual investors were able to take advantage of the market crash to buy more, while the election uncertainty promoted overseas funds to pull out money.

Interestingly, a day earlier, when the markets shot up over 3 per cent — reacting to the exit polls — retail investors had pulled out Rs 8,588 crore, signalling profit-taking at higher levels and later buying at lower levels.

FPIs did quite the opposite, as they were net buyers to the tune of Rs 6,617 crore on Monday.

Retail investors pumped in another Rs 3,000 crore, while FPIs pulled out Rs 6,500 crore on Wednesday.

The data for the next two trading sessions is still awaited. As more clarity emerged around government formation, the markets bounced back to recoup all the losses over the next three trading sessions, which shows that retail investors rode the volatility better.