New Delhi, Aug. 12 -- The retail investors seemed to be gung-ho on the Indian stock market despite the threat of a tariff war as they ploughed in a record Rs.42,702 crore in July, making it the highest-ever monthly tally for the segment and a sharp 81% surge.

The sectoral funds, grabbing the highest 15% share, recorded a whopping 1,882% increase month-on-month. The small-cap category recorded a 61% MOM growth to Rs.6,484 crore, and commanded 10% of the overall inflows. This retail investor behaviour demonstrated both the strong attraction of past performance as well as the willingness to take risks.

But is this a wise strategy for investors as tariffs unleashed by Donald Trump threaten to derail the Indian stock market?

Taking historic...