"Retail investors are not making money because the mid and smallcaps are down. This phase of the rally is led by frontline stocks where the bulk of FII dollars is flowing in. That is why even though the indices are rallying, investor portfolios are down," equity strategist Kranthi Bathini of Wealth Mills Securities said.
Foreign investors or FIIs are buying Indian stocks aggressively, taking domestic equity barometer Sensex to all-time record high levels, but the mood on Dalal Street is not as
jubilant as many investor portfolios are still struggling for breath.
During the last one month, Nifty has returned 4.25% while Nifty Smallcap is flat and Nifty Midcap is up only 1.44%.
The ongoing rally in the market, which has taken the Sensex to record highs, is led by largecaps particularly in banking. IT majors, too, have been in demand in the last couple of days. NSDL data shows out of the total investment of Rs 28,888 crore between November 1-15, FIIs spent a bulk of Rs 11,452 crore in financial services alone. FIIs are also betting on FMCG, IT and auto stocks.
Analysts say a vast majority of retail investors, particularly newbies, have avoided largecaps believing they are high priced. (Contrary to Nivesh Mitr client's portfolios which are inclined to Largecaps and hence, performing better than their retail counterparts, whose portfolios are invested more in mid & smallcaps).
At 12-month forward PE of 19.7x, Nifty is 22% above its long-term average, with most sectors barring banks trading at higher valuations vs their long-term averages.
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Source: ET Markets