Finance Stocks

The finance sector or the financial services sector comprises various services provided by lending institutions, brokerage firms, and other companies. In India, the financial sector is undergoing rapid expansion not just in terms of the growth of existing financial services firms but also in new companies entering the market.

The sector includes commercial banks, Non-Banking Financial Companies (NBFC), insurance companies, co-operatives, mutual funds, pension funds and more. Currently, the banking regulator is also allowing new entities, such as payment banks, to be created, which is an additional type of entities operating in the sector.

As of July 2023, Assets Under Management (AUM) managed by the mutual funds industry in India touched US$ 556.81 billion, marking about a two-fold increase in the last 5 years. Another important component of the financial industry is the insurance sector, which has been growing rapidly. There are more than 2,100 fintechs in operation in India.

In July 2023, Unified Payments Interface (UPI) recorded 9.96 billion transactions worth US$ 184.16 billion. Also, the private wealth management industry is showing potential, and the country is anticipated to have about 6.11 lakh high-net-worth individuals (HNWIs) by 2025. This rise will make India the fourth-largest private wealth market in the world by 2028. Moreover, in the Union Budget 2022-23, the Indian Government announced plans for the Digital Rupee, which is the Central Bank Digital Currency (CBDC).

• Regulatory Environment: The financial sector in India is heavily regulated. Even minor changes in regulations can significantly impact financial institutions. Stay informed about regulatory developments and their potential impact on the sector.
• Interest rate fluctuations: The finance sector is sensitive to interest rate changes. Monitor interest rate trends as they influence borrowing costs, investment returns, and the profitability of financial institutions.
• Economic conditions: The economic health of the country directly affects the finance sector. Analyse economic indicators like GDP growth, unemployment rates, and inflation. These factors provide good insights into the overall financial landscape.
• Technological changes: Keep an eye on technological advancements and disruptions in the finance industry, such as digital banking and fintech innovations. Now, several traditional banking and financial facilities are changing to digital. Embracing technology is crucial for the long-term success of financial institutions.
• Global economic conditions: The finance sector is interconnected globally. Consider global economic factors, geopolitical events, and international financial trends that can have spill-over effects on the finance industry.

Investing in finance stocks via Angel One is easy. Simply follow these steps:

• Log in to your Angel One account.
• Click on the search icon and look for your desired finance sector stock.
• Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
• To complete your transaction, click on the ‘Buy’ button.

If you don’t have a Demat account with Angel One, you can open one for free online within minutes.