Increased interest because of expected short-term volatility, say
brokerages.
Domestic
brokerages have seen clients raise bets on American stock markets in the run-up
to the US
presidential elections, results of which are awaited.
Some brokerages announced tie-ups to offer overseas stock market access to
their clients in recent months, fuelling increased investment activity, even as
volatility increased ahead of poll results.
Many younger
customers look to invest in technology firms that they are familiar with but
which are not available in India, said Prakarsh Gagdani, chief executive
officer at 5paisa Capital. Companies like Facebook and Twitter are listed in
the US.
“We have started
offering customers investment opportunities in US equities with zero commission
since the last two months in partnership with Vested. The traction has been
very good.... We have seen steady demand and new customer queries for investing
in US
markets,” he said.
“There is
increased interest in the markets on account of the expected short-term
volatility that elections typically cause... During the run-up to polling
dates, we saw a 20-25 per cent increase in US investing among Indians. This was
evident from the increase in enquiries as well the increase in smaller overseas
remittances that we saw,” said Arun Chaudhry, head of online business and
products, broking and distribution at Motilal Oswal Financial Services.
The Chicago Board
Options Exchange Volatility Index (VIX) was higher than usual, at above 30,
even as votes were being counted. The index is a measure of how sharply the
stock market is expected to move. It is often called the stock market’s ‘fear
gauge’.
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