New Delhi: Amid rising investments in the stock market and BSE Sensex and NSE Nifty scaling fresh peaks, a finance ministry report stated that the stock markets around the world are booming, reinforced by recent policy announcements in a few countries, which raises the risk of a correction in the exchanges.
“Consequently, the risk of an eventual correction has risen. If the risk materialises, the spillover effect may be felt globally as well,” the report said.
The benchmark indices of the Indian stock market – Sensex and the Nifty – have been scaling new record highs since the US Federal Reserve announced rate cut.
Several market analysts have predicted a correction in the stock market which they say would be a healthy one for the exchanges.
It may be noted that investors, especially from the retail category, have been actively involved in the market. Huge amount of money is being invested directly into the stock market and Mutual Funds these days.
Sebi report on F&O losses
In a worrying situation, a recent SEBI study revealed that 93 per cent of individual traders incurred losses in Equity F&O between FY22 and FY24. The aggregate losses exceeded Rs 1.8 lakh crores over three years, the report mentioned.
“93% of over 1 crore individual F&O traders incurred average losses of around ₹2 lakh per trader (inclusive of transaction costs) during the three years from FY22 to FY24,” it stated.
According to data of Association of Mutual Funds in India (AMFI), Mutual fund inflows declined by a massive Rs 80 lakh crore to Rs 1.08 lakh crore in August 2024. The inflow stood at Rs 1.89 lakh crore in July 2024. However, equity Mutual Fund inflows surged Rs 38.329 crore in August as compared to Rs 37,113 crore in July.
AMFI informed that Average Assets Under Management (AAUM) of Indian Mutual Fund Industry stood at Rs 66,04,057 crore in August 2024. The AUM recorded an exponential rise from Rs 10.13 trillion as on August 31, 2014 to Rs 66.70 trillion as on August 31, 2024.
Finance Ministry confident of India’s growth
The report said India is set to achieve 6.5-7 per cent GDP growth in 2024-25 as indicated by the movements in high-frequency indicators till August. “A challenge on the macroeconomic front is of navigating the continuing uncertainty in global economic prospects. We will likely encounter a cycle of policy rate cuts globally amid fears of a recession in advanced economies and continuing geopolitical conflicts,” the Monthly Economic Review for August said.
A Finance Ministry reported stated that the risk of eventual correction in global stock markets may have spillover effects. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
