The din around the falling Sensex and depreciating Rupee has been hard to miss, and understandably, human nature makes us worry when markets falter. For many investors, even those with mutual fund investments, the recent market trends might feel like storm clouds on the horizon. But markets, much like seasons, naturally cycle through growth, correction, and recovery phases. What’s happening now isn’t the collapse of some fear; rather, it’s a moment for perspective, patience, and clarity about the underlying factors at play.
The equities landscape has seen corrections in the Sensex and Nifty, particularly since September 2024, causing unease. However, it’s worth noting that these indices have been on a nine-year bull run, delivering around 9per cent growth year-to-date, even after recent declines. Much of the decline stems from significant selling by Foreign Institutional Investors (FIIs), who have offloaded over Rs 1.19 lakh crore worth of equities through exchanges this year. Interestingly, while exiting the secondary market, FIIs have invested more than Rs 1.2 lakh crore in the primary market during 2024, including Rs 17,331 crore in December alone, making them net investors in India. This dual approach suggests the sell-off is more about short-term profit-booking and global fund reallocation than a loss of confidence in India’s long-term growth prospects.