The speculative trading by the retail investors leading upward swings in the prices of small and midcap
There is raise in speculative trading in the market. This may be due to recent announcement of stimulus package by the central bank for the revival of the economy. For the week ended in July 24, the S&P Smallcap index has raised by 1.4 percent while S&P Midcap index has gained by 1.2 percent in that week.
The earnings announcement by the top tier companies also kept the market under positive speculation and it is expected that market will further track it. Umesh Mehta, Samco Group, in a interview with moneycontrol said that the retail investors are more speculative and caused the price of small and midcaps to go up. It can be seen that for first quarter of the year 2020, the retail turnover was 57 percent of total cash volumes on exchange.
But, the experts say that the rising COVID-19 cases and tension between the US Sino relationships will affect the market and investors need to be investing rationally. Point to be noted is that the former deputy governor NS Vishwanathan also has warned the Indian banks to conserve capital so that, it could be used whenever it will be needed. He added that the future is still uncertain and there may be raise in case of NPA.
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