Share of institutional investors in market volume declines in June

The share of institutional investors, mainly foreign portfolio investors (FPIs) and mutual funds (MFs), in trading turnover saw a sharp decline in June, when the benchmark indices posted a 5 per cent gain. 

FPIs accounted for 12.2 per cent of the average daily turnover in the cash segment, while MFs’ participation accounted for 4.2 per cent of the volume. 

This was significantly lower than May, when FPIs accounted for nearly a fifth of volumes, and domestic MFs accounted for about a tenth. 

 

Incidentally, average daily trading volume for the month of June on the National Stock Exchange (NSE) was Rs 61,400 crore and on the BSE Rs 5,000 crore —double that of June 2019. Market players say the drop in institutional share indicates that the incremental growth in volume has come on the back of increased retail and wealthy investor participation. 

Many brokerages have reported a surge in new account openings by retail investors. Many new clients are joining from the tier-II and tier-III cities.