【MUMBAI】It is getting increasingly expensive for fund managers and big traders to buy quality stocks. With demand for such stocks remaining elevated due to a decline in domestic institutional selling and supply remaining short because of foreign investors' incessant appetite for potential winners, the impact cost — the expense while trading on the stock exchanges — of many of them has shot up.
Till mid-February, selling by domestic institutional investors (DIIs) ensured a constant supply of shares to foreign institutional investors (FIIs). But, with the market seeing a sudden surge, many investors are holding on to their stocks, while traders are taking delivery of their positions in contrast to their earlier strategy of squaring off the same day.
"The impact cost of quality high-beta papers has risen over the last few weeks as every one chases these stocks with the pace of economic recovery gathering steam," said Sunil Singhania, chief investment officer, Reliance Mutual Fund.
Continuing its record-breaking spree, the benchmark BSE Sensex hit another lifetime high of 22,869.85 today as stocks of capital goods, IT, healthcare and auto sectors led the rally on capital inflows amid a firming trend overseas. The NSE Nifty also maintained its rising trend by gaining 46.25 points, or 0.67 per cent, to hit a new all-time high of 6,861.60 points, surpassing its previous intra-day high of 6,838.00 touched in yesterday's trade.
○Higher growth may not create as many jobs
【NEW DELHI】A healthier world economy and a more decisive government at the Centre is expected to push up India's growth from decade low 4.9% likely this year and create more jobs.
But a Crisil report suggests that in recent years, there is lesser employment generation per unit of growth and just higher growth may not be sufficient to absorb everyone entering the workforce:
【News source】
Funds managers and traders in a bind as quality stocks turn pricey
Sensex hits new record-high of 22,869.85; Nifty touches 6,861
Higher growth may not create as many jobs
Your Comments