Mumbai, Aug. 29: Retail investors continued to park their money in equities even after the stock markets tumbled from their highs at the start of the year.

Data released by the Reserve Bank of India in its annual report for 2007-08 showed that Indian households had invested about 10.5 per cent of their total savings in shares and debentures till the end of March this year — a level that wasn’t seen even at the height of the previous bull runs.

At current market prices, the investment comprises 1.6 per cent of the country’s GDP. Investments of households in shares and debentures, including mutual funds, were at Rs 77,073 crore, up from Rs 51,086 crore last year.

This is surprising since equity markets have witnessed a huge correction since January because of the sub-prime crisis and other factors.

Household investment in small saving schemes,which have been declining over the past couple of years, turned negative as more money was parked in other asset classes that yielded higher returns.

Household investment in small savings instruments accounted for 12.2 per cent of the total financial savings in 2005-06. It tumbled to 5.1 per cent in 2006-07 and turned negative (minus 1.7 per cent) for the first time in 2007-08.

The total household savings in financial assets were at Rs 7,34,699 crore during 2007-08, lower than Rs 7,68,967 crore in the preceding year.

Although the percentage of bank deposits in a household’s total financial savings went up, they declined in absolute terms during the year.

In 2007-08, bank deposits were at Rs 4,06,448 crore, down from Rs 4,17,228 crore in the preceding year.

They now constitute 55.3 per cent of total household savings compared with 54.3 per cent in 2006-07.

The RBI added that household financial savings underwent some changes in preference pattern in 2007-08 against the previous year.

Savings in the form of currency and investment in shares and debentures as a percentage of GDP rose during the year, while savings in the form of deposits, claims on government, which includes small savings and contractual savings, as a percentage of GDP decreased.

Contractual savings comprise life insurance funds and provident and pension funds.