SIP flows cushioned Indian markets from deeper fall: Shriram Wealth

Consistent inflows from systematic investment plans have shielded Indian stock markets from more severe losses during the recent phase of foreign institutional investor selling, according to Vikas Satija, Managing Director and Chief Executive of Shriram Wealth.

Satija noted that in previous market downturns, similar levels of foreign fund withdrawals would typically have triggered drawdowns in the range of 40-50 per cent. The stability provided by retail investors channelling money through SIPs has helped moderate the market's decline and supported valuations during the current correction cycle.

The observation underscores the growing role of domestic retail participation in anchoring Indian equity markets. SIPs, which allow investors to deploy fixed amounts at regular intervals regardless of market conditions, have emerged as a stabilizing force during periods of volatile foreign capital flows.

Foreign portfolio investors have been net sellers in Indian markets in recent sessions, prompted by global monetary tightening and shifts in fund allocation strategies. However, the sustained domestic retail demand through SIPs has helped offset some of this outflow pressure, limiting the depth of market deterioration.