Confusing signal

Indices have surged, but broader markets still in loss

India’s financial markets produced a confusing performance in 2018-19. The benchmark big-cap indices produced good returns, but the broader market performance was negative. Foreign portfolio investors (FPIs) were net sellers, while domestic institutions (DIs) bought, on the back of steady retail investments in mutual funds. These dichotomies led to a situation where net market cap grew, but many investors suffered losses. The premier Nifty50 Index was up 14.9 per cent between April 1, 2018, and March 31, 2019. However, only 25 of the 50 stocks in that index registered gains. The mid-cap and small cap indices lost 3 per cent