Retail Investor Trading Turnover Slumps In June As Volatility Persists
Retail trading turnover falls in June amid volatility in the markets.
India’s retail investors lowered their trading interest as stock markets remain volatile amid selloff by skittish foreign investors, the ongoing geopolitical stress and the U.S. Federal Reserve’s rate tightening to curb inflation.
The retail category, comprising individual domestic investors, non-resident Indians, sole proprietorship firms and Hindu undivided families, has seen average daily trading turnover fall 21.8% over the previous month in June, according to data collated by BQ Prime from the National Stock Exchange’s website.
That coincides with the withdrawal of the foreign institutional investors from the Indian equity market. They have sold Rs 45,851 crore so far in June and Rs 2.12 lakh crore so far in 2022. The outflows mark global uncertainty and inflation, amplified by Russia’s invasion of Ukraine, prompting central banks to hike rates.
The Nifty 50 has slipped 3.03% in May and 5% in June so far. The benchmark has fallen 9.53% since the beginning of this year.
Retail investors were net sellers in four of the five trading sessions last week, according to NSE data. Those were the only days they had sold in June compared with seven days in May.
Retail participation in markets spiked globally in the last two years as investors looked to ride on an unrivalled rebound in equities from their pandemic-triggered lows. In India, too, such investors bet on ample global liquidity, vaccine optimism, quicker-than-expected economic recovery and foreign inflows.
Net investments by retail investors directly into Indian equities amounted to Rs 1.65 lakh crore in the fiscal ended March 2022—nearly 2.5 times the net inflows in FY21.
That was primarily led by more than 1.93 crore new investor registrations in FY22—the highest in any fiscal—on account of good returns in equities as an asset class and maiden offerings of new-age companies, drawing significant interest in equities from new and young investors. But this started to wane since January this year.