Leveraged bets on Indian stocks are heading for their first monthly decline since March, a sign that retail traders are cutting risk as the rally in some of the market's most speculative corners unravels.
Borrowed positions stood at 1.56 trillion rupees ($16.5 billion) as of Oct. 19, according to India MTF.com. That is down from a record 1.6 trillion rupees in September, which followed six straight monthly gains.
The pullback highlights growing caution among individual investors who had piled into smaller companies on borrowed money during the recent surge. Margin funding, which lets traders buy shares with credit from brokers, tends to amplify both gains and losses, making it a closely watched gauge of speculative appetite.
The shift comes as the rally in small-cap shares, which had driven much of the market's momentum, shows signs of faltering. Traders are now reassessing exposure to riskier segments as the sustainability of recent gains comes into question.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing