Stock Market Crash: Are Indian investors buying the dip?

Nasdaq 100, the tech heavy stock market index of US stock market has lost nearly 25 per cent over the last 1-year and is lower by about 7 per cent since the beginning of 2022. Some of the top US stocks including the investors favorite have fallen over 30 per cent.

Technology stocks remained a favourite with investors globally for a long time. Post the US Federal Reserve announcing a rate hike, the world’s largest technology companies have witnessed a widespread sell-off. In an rising interest rate scenario, the valuations that these tech companies enjoy gets impacted.

Also, unless other uncertainties around supply chain issues, oil prices, Ukraine invasion of Russia and the state of Chinese economic conditions settle out, the markets may continue to remain weak. However, easier said than done, the reversal may kick-in much ahead of the economic factors improvising.

Retail investors generally do not have the information and the resources to gauge the upcoming economic data as compared to institutions and big investors. To long term investors, buy-on-dips remains a better approach.

Viram Shah, Co-founder & CEO, Vested Finance says, “As seen on Vested Finance’s platform, Indian investors are buying into the dip.” Vested Finance is a California-headquartered U.S. Securities and Exchange Commission (SEC) Registered Investment Advisor (RIA) that provides an online platform enabling Indian investors to invest in the US stock market with zero brokerage fee.

Nasdaq Composite index is down by almost 25 per cent year-to-date (YTD). Out of them, there are 14 mega cap ( above $200 Billion) US stocks listed on Nasdaq stock exchange. Almost all of these mega cap stocks are down between 10 and 40 per cent.

Specifically to the tech stocks, Vested shares some interesting data points related to the investor activity spotted on Vested’s platform:

Amazon shares plummeted 14% on April 28th. On 29th April there was a spike of around 300% in net volumes (buy/sell transactions) on the Vested platform. In all of May, the volumes are up 150% compared to April.

On May 4th, Microsoft shares plunged 4%. On May 5th, there was a spike of 300% in the net volumes for Microsoft on the Vested platform.

For other Big Tech stocks like Apple, Tesla, and Google, there has not been any significant spikes in net volumes. But for all these stocks the number of users transacting have gone up by 60%, showing more interest from Indian investors in Big Tech.

There were no significant trends for the Meta stock.