 "Two of the largecap-oriented mutual fund (MF) offerings — flexicap and largecap funds — witnessed a spike in investor interest in October amid a fall in the equity market.")
Given the stock market correction, there have been concerns about investor attitudes. Foreign portfolio investors (FPIs) have been big net sellers through months, while the stock market has been buoyed up by domestic buying, especially via household inflows. If mutual funds see a slowdown or reversal of retail inflows, there could be a much deeper correction.
Such a trend of pessimism would show up as lower inflows to mutual funds, including lower SIP inflows. It would also result in lower trading volumes and lower prices in smallcaps and in futures & options (F&O) where retail investors take direct exposure.
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