Kamath sees 'crazy' retail investor moves during crashes

Retail investors have emerged as the significant force in the Indian stock market, particularly after the pandemic days. One key trend observed during the last five years is that these investors have consistently been net buyers of Indian equities despite many downturns and markets.

Data shared by Nithin Kamath, the CEO and co-founder of Zerodha, showed retail investors were buying stocks even during sharp market crashes of Covid lockdowns, 2024 election result day or even Monday's market fall.

"One of the crazy things about the last five-odd years is that retail investors have consistently been net buyers of equities. Whether they'll continue to buy the dip is anybody's guess," Kamath said.

Kamath, who is known for sharing his insights on stock markets on social media platforms, however, said investors might stay out of the market for years if the markets fall sharply — just like they did after 2008.

Indian markets have seen unprecedented growth in the last five years, surpassing the previous decade and a half in terms of expansion. This rapid rise, triggered by the global pandemic in 2020, has transformed the capital markets, making them more mainstream than ever.

Recently, Kamath came out with a Yearbook capturing significant trends in the Indian market over the last few years.

Kamath had earlier said investors shouldn't stop SIPs (Systematic Investment Plans) despite the downturn in the market. This was a word of advice for particularly those investors, who came to the markets after Covid.

Indian stocks are currently exhibiting wild swings, reacting to the announcements of US President Donald Trump. The market is also undergoing a correction, which started due to expensive valuations.

On Monday, the market saw one of the biggest falls since the dead-old pandemic days, triggered by global economic concerns, including the imposition of tariffs by US President Donald Trump. The high tariffs heightened trade tensions and led to fears of a recession worldwide.

Despite these challenges, domestic investors including the institutional ones have continued to support the market, buying aggressively during declines. For instance, when the market fell nearly 4% on Monday, domestic institutional investors bought stock worth over Rs 12,000 crore.

This domestic support often helps in mitigating the impact of foreign investor outflows, which have been significant over the past few months.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)