Selling pressure leaves MFs in the lurch - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Selling pressure leaves MFs in the lurch

Apr 4, 2000

Mutual funds (MFs) will view the heavy selling pressure on the bourses today with a lot of discomfiture. As major stocks are hitting the downward circuit, MFs find themselves in the lurch, as they are unable to get out of stocks to meet demand for redemptions. Stock market darlings like NIIT, Satyam Info, Infosys have hit the downward circuit for the better part of the day. This has affected investors in these stocks, who were unable to sell. Mutual funds (MFs) in particular have been adversely affected by the negative sentiment in these stocks and to rub it in, they are reduced to being mere spectators to the blood bath on the bourses. As stocks hit the downward circuit, MFs are unable to offload in order to meet redemption demand from nervous investors.

As panic seems to spread in the markets, tomorrow may witness a repeat performance in these counters as they are likely to open on the downward circuit. This will be more bad news for MFs, who will face increasing redemptions, but will again not be able to sell. This implies that investors who remain invested in these funds will bear the brunt of the decline in net asset values (NAVs) to the benefit of those investors who exit early.


Equitymaster requests your view! Post a comment on "Selling pressure leaves MFs in the lurch". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS