Demat account openings hit 19-month high in August amid mid, smallcap rally; total count crosses 12.66 crore

August saw a surge in new investors opening demat accounts, even as benchmark indices fell. August saw the highest number of new entrants in the last 19 months.
A total of more than 3.1 million Demat accounts were opened in August, compared with 29.7 million new accounts a month ago and 21 million for the year, according to the Central Deposit Bureau and the State Securities Depository Authority. , which was the highest account opening rate since January 2022. Before . Total demats exceeded 12.66 billion, up 2.51 percent month-on-month and 25.83 percent year-on-year.

economic stimulus

Axis Securities analyst Rajesh Parviya said the Indian economy has performed strongly in recent days, with the market trading near record highs, reflecting India’s long history. He said there was a sense of trust between them. encourage. Remarkably strong economic growth, various short-term and long-term infrastructure projects promoted by the government, and investment in the private sector are boosting domestic demand, further boosting market valuations and attracting more young millennials with higher disposable incomes. Parviya added. Over the past month, the relatively stable performance of benchmark indices has led many retail investors to shift their focus to fundamentally strong but undervalued stocks, especially in sectors where the economy is seeing positive change. Did. This shift in sentiment led to increased index participation and trading volume for mid- and small-cap stocks, both of which reached all-time highs. In addition, analysts said growing optimism and confidence in financial markets and growing awareness of equities as an asset class contributed to the increase in the number of demat accounts.
Some analysts said the surge in IPOs, which average returns of about 35% to 40%, has attracted many new entrants. Additionally, mutual funds outperformed benchmark indices, offered higher returns than traditional savings plans, and attracted both passive and active public interest. “Buy when it goes down”

Meanwhile, despite a strong domestic stock market in August, analysts recommend buying on the lower side and using the short-term correction as a cheap entry point. The short to medium term trend is currently negative to neutral, but we expect the bulls to continue to take the lead and propel the index towards the 19,800 to 20,000 levels.
In its latest communication, Axis Securities kept its December 2023 Nifty target at 20,200 and its value at 20 times its December 2024 profit. The brokerage advised investors to keep 10% of their portfolios for sufficient liquidity. This liquidity can be used during market downturns to gradually build positions in quality companies with good earnings prospects. The recommended investment horizon for this strategy is 12-18 months. India’s flagship indices Sensex and Nifty fell about 2.5% each in August, while the broader BSE mid-cap and small-cap markets rose about 2.6% and 6.1% respectively.