Sentiment on D-Street most bearish since Covid

Advance Decline Ratio, widely used to gauge investor sentiment and market strength, in February was at 0.72 — the lowest reading in five years.

A declining ADR means more stocks are falling as against the gainers and points to a weakening market. In January, the reading was 0.9, while in the period before October — when the market started declining, it was in the range of 1 to 1.28 on average.

«The declining ADR indicates that the markets have been quite bearish due to a lack of buying interest, where the retail investors are shying away from buying and the foreign investors are engaged in persistent aggressive selling,» said Naveen Kulkarni, CIO, Axis Securities.
While markets fell in January as well, the fears on account of Trump trade tariffs took their full form in February, he added. «The markets were excessively bullish prior to the declines last year, and the negative sentiment is also in excess in a similar vein,» he said.

Benchmark indices — Sensex and Nifty — are down around 15% each from the peaks made on September 27, triggered by a rebound in Chinese equities, stronger dollar and weakening domestic corporate earnings, prompting record foreign selling.

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