Market volatility weighed on demat account additions in April, which increased modestly by 2.22 million, bringing the total to 194.45 million, compared to a rise of around 1.84 million in March.
The total April demat addition comprised of 1.71 million new accounts by CDSL - slowest addition in two years - while NSDL added 0.5 million accounts, after four months of subdued activity.
Despite a slight uptick in April, data suggests that investors were cautious of opening demat accounts due to ongoing market volatility and tariff-related uncertainty.
While volatility persisted, equities managed to recover during April, partially supported by foreign institutional investors resuming buying. In April, benchmark indices Sensex and Nifty 50 advanced by over 3.5 percent each, while the broader BSE Mid and Smallcap indices rose by 4 percent and 3.4 percent, respectively.
Experts said that while the foreign investor sentiment has improved, the domestic retail participation remains tentative. This caution is attributed to ongoing trade negotiations, geopolitical uncertainties, muted corporate earnings, and a lack of enthusiasm in the primary market.
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