The Indian stock market is currently under pressure due to rising yields and a slowdown in earnings, which is causing both domestic and foreign investors to struggle.
Recent data shows a decline in net new Systematic Investment Plan (SIP) account additions for the third consecutive month, with the SIP stoppage ratio reaching a five-month high in October.
Additionally, the Assets Under Management (AUM) of equity mutual funds has decreased for the first time in a year, primarily due to mark-to-market losses.
On the other hand, there has been a significant inflow into liquid mutual funds, indicating a change in investor sentiment amidst the challenging market conditions.
These trends align with the theory that a declining market tends to discourage new investors, as seen in the current dynamics of the Indian market.