Professionals are booking profits.

The benchmark stock market index, the BSE Sensex hit an all time high of 85,836.12 on 26 September 2024, since when it has dropped to 81,501.36 yesterday. Trading Economics. "Foreign funds withdrew more than $7 billion from Indian equities in the month through Oct 14, according to data compiled by Bloomberg." "A fierce rotation to China following a barrage of stimulus measures sucked money out of other Asian markers. Purchases of nearly $7.2 billion by local investors in the same period helped offset the losses in India, but the sentiment is turning." ET. "Brokerages predict that companies in the benchmark NSE Nifty50 index will either report flat or low single digits profit gains for the quarter ended September." "The MSCI India gauge is trading at a valuation of almost 24 times its 12-month earnings, versus a five-year average of about 21." ET. "In just four years, retail assets under management (AUM) in mutual funds have more than tripled, crossing Rs 17 trillion." Others have benefited. "Over the past 15 months, Indian promoters have sold over Rs 1.17 trillion in equity" and "private equity funds have exited positions worth Rs 1.15 trillion during this period." In 2024, Whirlpool sold a 24% stake in its Indian subsidiary for $468 million, British American Tobacco sold a 3.5% stake in ITC for Rs 174 billion and Tencent sold a 2.1% stake in PB Fintech for Rs 16.68 billion, wrote Amit Goel. It's not just the secondary markets, even Initial Public Offerings (IPO) are oversubscribed many times over. "The IPO of e-commerce SaaS (software as a service) platform Unicommerce was oversubscribed a whopping 168 times, while that of co-working space provider Awfis saw over-subscription of over 100 times," wrote Abhishek Mukherjee. "Resourceful Automobile, a small bike dealership based in Delhi, has stunned the market by attracting bids worth Rs 48 billion for its modest Rs 120 million IPO. The dealership, which operates two Yamaha showrooms under the name 'Sawhney Automobiles' has just eight employees." TOI. The Reserve Bank of India's latest State of the Economy report points out that "India accounted for the highest number of IPOs globally (27% by volume) in [the first half of] 2024." "So why is there such huge demand for IPOs? The large sums of money chasing IPOs tells us that these investors do not see other viable investment opportunities available to them. On the other hand, it can also be argued that the huge returns delivered by stocks since March 2020 have made other investment avenues unattractive to investors besotted with equities," wrote Vivek Kaul. "As of June 2024, the total value of socks held by Indian households, both directly and indirectly, stood at Rs 134 trillion, equivalent to 44% of India's gross domestic product (GDP). At the end of 2019, this was Rs 42 trillion or 21% of GDP." Individuals are also trading in futures and options (F&O) "which derive their value from stock prices and indices made up of stocks". Individuals trading in F&O have lost a total of Rs 610 billion, wrote Kaul. Professionals are selling while amateurs are buying. How long will it last?