The average daily turnover in the cash segment of equity markets reached a nearly 22-month high, driven largely by the fear of missing out (FOMO) among retail investors. Despite increasing uncertainty in the market, retail investors have continued to invest significantly in equities, seizing on market dips to inject additional capital.
In this context, the National Stock Exchange (NSE) reported an average daily turnover (ADT) of ₹1.42 lakh crore in May, marking a 5 percent increase from ₹1.35 lakh crore in April. This surge came amidst heightened volatility spurred by fluctuating peace negotiations between the United States and Iran. Similarly, the Bombay Stock Exchange (BSE) experienced a near two-year high in ADT, reaching ₹10,596 crore, up 14 percent from ₹9,323 crore in April.
Sorbh Gupta, Head of Equity at Bajaj Finserv Asset Management, noted the resilience demonstrated by retail investors amid ongoing market fluctuations over the past 18 months. He remarked that investors, particularly those involved in mutual funds, are adopting a more disciplined investment approach, rather than reacting impulsively to short-term market changes. Gupta suggested that unless there is substantial pressure on household cash flows or an episode of extreme volatility, this trend of sustained investment is expected to persist.
Ravi Singh, Chief Research Officer at Master Capital Services, also highlighted that despite global uncertainties, the cash market remains robust due to an increasing number of domestic investors viewing equities as a long-term wealth-building option rather than responding to transient market events. Singh emphasized that while volatility is likely amid global developments, interest rate fluctuations, and geopolitical risks, the overall shift of household savings towards financial assets will likely support strong retail participation and cash market volumes in the long term.
In May, the Sensex fluctuated in response to the ongoing tensions in West Asia, ultimately closing down three percent, or 2,493 points, at 74,776 points. The Nifty index fell two percent, or 572 points, to end at 23,547 points, oscillating between 23,200 and 24,500 during the month.
Gaurav Bhandari, CEO of Monarch, Networth Capital, pointed out that while global uncertainties may induce short-term market volatility, domestic investors are concentrating more on India’s strong economic fundamentals, promising corporate earnings, and long-term wealth creation opportunities. He noted that the consistent growth of systematic investment plans and a gradual shift from traditional savings to financial assets has fostered robust domestic liquidity, thereby enhancing market participation.
Bhandari remarked that although market corrections and global events could lead to temporary fluctuations in trading activity, retail investors today are more informed and disciplined than in the past.
Published on May 31, 2026.
