Market stability cannot be achieved without stable policies and taxation, according to Finance Minister Nirmala Sitharaman's remarks on Tuesday.
The Union Minister added that the government has faith that Prime Minister Narendra Modi, who is currently contesting the Lok Sabha elections, is trying to win and take the helm for the third time in a row. She stated at a BSE stock exchange event that stability at the center is necessary for a healthy financial market and that PM Modi's impending return will provide it.
Her comments come at a time when the headline Nifty50 index has returned roughly 21% (up 3,903.1 points since May 12, 2023) over the previous year due to favorable growth projections, low inflation, and the trend of foreign investors choosing India as a place to invest.
The Indian market is utilizing technology very effectively these days. Sitharaman added.
The minister cited several instances of improved technology bolstering market efficiency, such as Dalal Street's successful implementation of the "T+0" system, which stands in stark contrast to a number of overseas markets.
FM also highlighted mutual fund participation. 10 years ago, mutual funds had assets under management worth Rs. 6 lakh crore. which has increased to a whopping 54 lakh crore. Mutual fund assets have seen over a 10-fold increase in their assets under management (AUM).
Demat Account Opening
According to reports, the total number of demat accounts reached 13.93 crore when 42 lakh new accounts were opened in December, setting a new record.
Compared to November, when 28 lakh new accounts were added, December saw the addition of 42 lakh new accounts, a 50% increase.
An increase in stock market activity is directly correlated with the number of new demat account openings. A bull market usually draws in more new investors, and during a bear market, there is typically a decline in the number of active traders and investors.
The number of demat accounts directly affects market volume. Foreign investors and foreign institutional investors used to be market movers, but the increasing numbers of demat accounts from retail investors are the new shock absorbers in the market.
