Diverging trade

Appeal of direct equity investment is waning

Rising interest rates and a lacklustre stock market may have induced some behavioural changes in retail investors. Inflows into equity mutual funds remain strong, but individuals appear to have pulled back on direct exposures to the stock market. Data also indicates that some investors have moved investments from equity into fixed-income instruments, while others have moved into the highly speculative derivatives segment. Going by the National Stock Exchange (NSE) data, individual investor participation dropped to a multi-year low in January, and the number of active traders on the NSE also declined for a seventh month in a row. Price declines