Even as the Coronavirus pandemic hit economic growth and outlook, the domestic capital markets reported strong performance in the current fiscal.
According to ICRA research, the market traction has been supported by strong foreign portfolio investor (FPI) investment inflows, optimism related to a recovery after the graded reopening of the economy, and steady retail investor momentum. In addition, promising results on Covid-19 vaccines, lower interest rates, and lower yields on bonds have had a favourable impact.
The equity markets reported an aggregate turnover of Rs 4,222 lakh crore in the nine month period of 2020-21, registering year on year growth of 66 per cent.
The average daily turnover (ADTO) increased to Rs 22.46 lakh crore. In the comparable period of FY 2020, the figure stood at 14.39 lakh crore.
Based on anecdotal evidence, ICRA said that equity markets seem to have emerged as an unlikely beneficiary of the pandemic, with the work-from-home option and limited investment opportunities, driving investor interest towards capital markets.
The total number of demat accounts, according to the research, increased to 498 lakh as of December 2020 and 467 lakh as of September 2020 from 408 lakh in March 2020 and 359 lakh in March 2019. “This translates into a net addition of 10.03 lakh accounts per month in the current fiscal, more than twice the monthly additions in FY2020 (4.08 lakh per month),” it said.