While many lament the extreme dependence of Indian equity markets on global factors, the phenomenon may have something to do with the disappearance of the long-term retail investor.
According to market data, at present, foreign institutional investors account for chunk of the long-term 'sticky' investments in the country's equity markets.
The data also show that daily trading was mostly carried out by domestic players, most of whom do not carry over their investments even into the next month.
For example, over the last one year, there has been a steady selloff by retail investors, which was lapped up by FIIs and mutual funds.
During the period, retail investors were net sellers of Rs 31,700 crore (Rs 317 billion) on the two major exchanges in the country, while FIIs and mutual funds increased their exposure by more than Rs 62,000 crore (Rs 620 billion), including primary market purchases.
"After the Sensex touched 6,000 more last year," says Jayant R Pai, vice-president for institutional equity at Parag Parikh Financial Advisory Services, "Many retail players were selling