India’s small traders are snapping up shares of U.S. retail investor favorite GameStop Corp, making the online game retailer essentially the most traded inventory on some Indian brokerages after nameless social media posts fuelled a frenzied rally.
Shares of GameStop have surged 1,700% since January 12 as beginner U.S. traders, monitoring social media feedback, have piled in and compelled skilled short-sellers to desert their positions with heavy losses.
This week, GameStop accounted for 19% of the trades on Vested Finance, an Indian funding agency that helps Indians buyor promote U.S. shares, and 15% of the trades on its rival Stockal, making it essentially the most traded inventory on each platforms.
“It is fairly shocking to see Indian traders leaping on the GameStop bandwagon,” Stockal co-founder Sitashwa Srivastava informed Reuters.
“This reveals a marked shift in investor behaviour from simply utilizing U.S. shares to diversify their portfolios to dashing after a rally primarily based on social media discussions. It could possibly be reckless nevertheless it works for some.”
Regardless of India’s extremely restrictive cross-border funding guidelines, Indians have been inserting massive bets on U.S. equities this yr as American shares recovered faster than markets in India from a crash sparked by the coronavirus pandemic.
Indian traders venturing into U.S. shares normally desire high world firms equivalent to Apple, Amazon, Fb and Tesla as they give the impression of being to diversify their holdings in India.