Missed the rally? No worries... You may yet get a chance to buy at lower levels
investors need not rush to purchase equities at record levels. If history is to go by, the market may give them buying opportunities this year, too. According to a study by ICICI Direct on index declines in the past 12 years, the Nifty fell between 10% and 16% every year on nine occasions.
This excludes the 38% drop in the index in 2020.
In the case of mid-cap and small-cap stocks, they have fallen every year in the past 12. The ICICI Direct study showed the Midcap 150 index fell between 10% and 24% on eight occasions, excluding the 38% tumble in 2020. The declines in small-cap stocks have been sharper.
In the 12 years under review, the Smallcap 100 index slumped between 10% and 34% on 10 occasions. In 2020, the index plunged 47%.
Fund managers said modest and brief declines in mid-cap and small-cap stocks in recent times make them more vulnerable to steeper corrections.
«Smallcaps and midcaps have seen a largely one-way move in the past three years without any time correction as well,» said Harsha Upadhyaya, chief investment officer at Kotak AMC. «This indicates that volatility in the segment will be higher with moderate returns.»
Indian equity markets in 2023 extended their winning streak for the eighth consecutive calendar year, with the Nifty gaining 20% in 2023.
