Rising interest rates and a lacklustre stock market may have induced some behavioural changes in retail investors. Inflows into equity mutual funds remain strong, but individuals appear to have pulled back on direct exposures to the stock market. Data also indicates that some investors have moved investments from equity into fixed-income instruments, while others have moved into the highly speculative derivatives segment. Going by the National Stock Exchange (NSE) data, individual investor participation dropped to a multi-year low in January, and the number of active traders on the NSE also declined for a seventh month in a row. Price declines in the small-cap categories, which are the favourites of retail investors, signalled lower demand for these stocks, which is usually a strong indication of waning retail interest. Although the Nifty50 itself has gained about 3.5 per cent in the last 12 months, the Nifty Smallcap 100 index has declined 10 per cent during the same period.