October 22, 2020 3:01:48 am
Two months after Reserve Financial institution of India (RBI) Governor Shaktikanta Das mentioned there was a transparent disconnect between the sharp surge within the inventory markets and the state of actual economic system, Securities and Trade Board of India (Sebi) Chairman Ajay Tyagi on Wednesday mentioned the restoration out there has been “broad-based” and the participation within the fairness market is “larger now than ever earlier than”.
After the declaration of pandemic in March 2020, the decrease circuit breaker was triggered on two events inside a span of simply two weeks —an prevalence which has by no means occurred up to now. “The Volatility Index VIX went as much as 84 in March from a mean of 15 within the earlier 3 months. SEBI took some well timed surveillance measures with respect to exposures and margins to curb volatility. The markets have recovered properly since then,” Tyagi mentioned.
Throughout April- September 2020, 63 lakh new demat accounts had been added as in comparison with 27.4 lakh accounts in the course of the corresponding interval final yr, a rise by round 130 per cent, he mentioned on the CII Monetary Markets summit.
“It’s not simply the massive cap but in addition the mid- and small-cap indices which have recovered because the lows hit in March 2020. Whereas the massive cap and mid cap indices have elevated round 55 per cent, the small cap index has elevated round 70 per cent,” Tyagi mentioned.
Whereas statistically the indices may go up due to sure shares which have comparatively excessive weights, Sebi’s evaluation reveals the restoration is just not solely within the heavyweight shares, however is throughout the board within the index, he mentioned.
The market restoration occurred at the same time as GDP contracted 23.9 per cent within the June quarter. The Sensex, which hit a low of 25,638.90 earlier this yr, closed at 40,707.31, an increase of over 15,000 factors, on Wednesday.
The home fairness market acquired round $11 billion of web FPI investments thus far on this monetary yr. “Whereas most rising markets together with Brazil, Taiwan, South Korea, Thailand, South Africa and Malaysia noticed FPI outflows in calendar yr 2020 up to now, India has witnessed web FPI inflows in the identical interval,” he mentioned.
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