Market Movers: High Beta Stocks Get Crushed As Robinhoods Have Mini Panic Attack
You know the Robinhoods, don’t you?
Newbie investors who describe investments in cool slang and internet memes, and use cool mobile trading apps like Zerodha or Upstox. Yes, the same breed Warren Buffett compared to players from last month and Atul Suri from Marathon Trends is having nightmares.
So, the little bird tells us that over the course of the day, a sudden shift in the market towards red territory made some retail investors fear that the greed calculus is finally here. We have heard that there has been a liquidation of the retail outlets as if judgment day has arrived, but luckily the reality is much more boring, at least, so far.
Retail investors regained their composure as soon as possible, as benchmarks barely fell, even by 1%.
But a price has been paid
That said, the price has been paid by the market favorite these days – high beta stocks. The Nifty High Beta 50 Index, a measure of 50 high beta stocks in the market, fell 1% during the day, underperforming Nifty50, which fell 0.7%.
Likewise, another favorite of retail investors, small-cap stocks, posted strong earnings throughout the day, with the Nifty Smallcap 100 Index having the worst day among most major market indices. The small-cap index fell 1.4% as retail investors rushed out fearing their party was finally over. Only time will tell if this is the case.
Banks are slowly becoming the most unpredictable business on Dalal Street. The banking pack which jumped at the end of May as if all investor fears were dismissed is again in crisis as its correction prolonged the downtrend until the second day in a row. While on the one hand investors have rejoiced at the reduction in stress in the system, on the other hand, they are still not convinced that the sector is out of the woods. This is after even Morgan Stanley turned bullish on state banks.
Bet on cold drinks
Varun Beverages, the bottler of Pepsi, saw its shares rise 3% in a weak market. Ventura Securities believes that as more people come out, investors can count on the bottle of Pepsi in retail stores on sale like hotcakes. The brokerage firm expects sales growth of 20 percent per year over the next three years. Perhaps the best bet will be the manufacturers of diabetes drugs.