The Indian equity market staged a strong rebound in April, with the benchmark Nifty 50 index rising 4% during the month. The rally was driven by strong inflows of foreign institutional investors into the domestic market and signs of no further interest rate hike by the Reserve Bank of India (RBI) amid easing inflation.
With the total number of demat accounts expected to increase to 116 million in April 2023, positive investor sentiment also led to an increase in daily trading activity.
However, according to a report by domestic brokerage Motilal Oswal, the incremental number of new accounts declined 18% MoM to 1.6 million during the month from 1.9 million in March.
“This figure is significantly lower than the average new accounts added per month in FY23 (2.1m on average),” the brokerage said.
In terms of total and incremental demat account market share, Central Depository Services Limited (CDSL) continues to gain on MOM basis.
Meanwhile, the active users of the National Stock Exchange (NSE) continued to decline for the tenth month in a row. The total number of active user clients at NSE decreased by 16.3% YoY and 4.6% MoM to 31.2 million in April. The magnitude of the decline was higher at 1.5 million accounts in April as compared to 0.9 million in the previous month.
As per the report, the top five discount brokers account for 60.1% of the total NSE active clients, up from 60.0% in the previous month.
Additionally, the total average daily turnover or ADTO volume in capital markets increased by 3% MoM in April 243 lakh crore driven by continued traction in the Futures & Options (F&O) segment and strong recovery in Cash ADTO (excluding retail).
Overall Retail ADTO up 5% MoM 92 lakh crore led by F&O ADTO which was 6% MoM. However, cash ADTO dipped MoM to 7% 22,000 crores were added to the brokerage report.
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