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Business News/ Markets / Stock Markets/  Retail investors have come in a big way: FM Sitharaman on stock market volatility
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Retail investors have come in a big way: FM Sitharaman on stock market volatility

Retail investors have come in a big way that they seem to act like shock absorbers, said FM Sitharaman in an event on Tuesday

Union Finance Minister Nirmala Sitharaman (PTI)Premium
Union Finance Minister Nirmala Sitharaman (PTI)

Finance Minister Nirmala Sitharaman on Tuesday said retail investors seem to act as shock absorbers even when foreign portfolio investors continued to pull away amid volatility in stock market as there has been a very significant increase in retail investor numbers during the pandemic.

"Retail investors have come in a big way that they seem to act like shock absorbers... if FPIs went away, our markets did not really have to show their ups and downs in a very distinct way because small investors in the country have come in a big way," FM Sitharaman said speaking at an event of the corporate affairs ministry as part of the Azadi ka Amrit Mahotsav.

In March, the Central Depository Services (India) Ltd said the number of active Demat accounts opened with it touched the six crore mark. In recent months, the stock market has been witnessing significant volatility and foreign portfolio investors going on a selling spree amid tightening monetary policy actions to curb rising inflation and geopolitical tensions.

Continuing its heavy selling spree for the eighth consecutive month, foreign investors (FPIs) pulled out nearly 40,000 crore from the Indian equity market in May on fears of an aggressive rate hike by US Federal Reserve that dented investor sentiments. US Fed has hiked rates twice this year to battle surging inflation caused by the disruption in supply chain due to the war between Russia and Ukraine.

With this, net outflow by foreign portfolio investors (FPIs) from equities reached at 1.69 lakh crore so far in 2022, data with depositories showed. Foreign investors have been taking out money from equities in the last eight months (from October 2021 to May 2022), withdrawing a massive net amount of 2.07 lakh crore.

(With inputs from PTI)

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Published: 07 Jun 2022, 01:24 PM IST
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