New Delhi, April 21 -- In equity markets, an acid test of new investors is how they respond when a crisis hits and the market crumbles. Do they rush for the door? Or, do they affirm their intention to be there for the long term?

A mild form of that acid test roiled Indian markets, along with global ones, in March. The benchmark equity index, BSE Sensex, tumbled 11% that month alone.

At the same time, Indian investors did not panic amid the carnage and demonstrated an inclination to use the opportunity of lower valuations to invest more, the latest data on Indian mutual funds shows. In the process, they also burnished the credentials of Indian mutual funds not only as an investment vehicle, but also as a mover of Indian markets.

Data on...