Mumbai: Apart from selling pressure from foreign institutional investors (FIIs), Indian equities are also witnessing a change in the daily volatility picture. The daily average of Advance Decline Ratio (ADR), which was 51 per cent in August, has gradually declined over the next two months to 32 per cent in November.
The forward decline ratio indicates that stocks are falling more than they are rising. The lower this ratio is, the weaker the investor sentiment can be said to be.
ADR, which was 51 per cent in August, fell to 47 per cent in September and 32 per cent in October. Thus, the ADR of November may be similar to that of October, but it is significantly lower than that of September and August. If the amount of decline is more than the rise of shares, it can be said that investors are losing interest in buying shares.
After reaching a peak of 85,000 in the last week of September, the benchmark Sensex and Nifty50 indices have fallen by ten percent. Not only this, a widespread decline is also being seen in midcap and smallcap sectors.
When there is a decline in the market, the biggest impact is seen on midcap stocks. After massive selling of Rs 1.14 lakh crore in October, foreign investors continued to sell net worth Rs 25,000 crore in the first fortnight of November.
The Indian stock market, which was known as a buyers’ market for the last two and a half years, is now becoming a sellers’ market. There are more than 3200 stocks listed on BSE.
