Indian stock market set for record yearly flows from retail investors

By Chiranjivi Chakraborty 

India’s stock market is on pace to receive the biggest annual inflow ever from small investors, underscoring their continuing love affair with equities.

 

Mom-and-pop investors poured a net Rs 1.54 trillion ($18 billion) into stocks on the National Stock Exchange of India Ltd. this year through Nov. 30, according to data from the nation’s largest bourse. This figure already tops the Rs 1.42 trillion invested by the cohort in 2021.

 

The record purchases stand in contrast to the marked reduction in foreign inflows. Global funds have bought just $14 million worth of Indian equities this year, marking the smallest annual investment in Bloomberg-compiled data since 1999. 

Slowing earnings growth and concerns over a sluggish consumption economy have seen foreign investors pull Rs 98,950 crore from India’s $4.9 trillion stock market since Oct. 1. That’s more than halved the benchmark NSE Nifty 50 index’s annual gains to little over 9 per cent. 

 

 

The weakness in share prices “presents a healthy opportunity” for investors, Bajaj Financial Securities said in a note. The brokerage expects the Nifty to deliver a 19 per cent return over the next 12 months, reaching a potential target of 28,700.

 

Robust flows from local investors have put India’s market on pace for a record ninth year of gains. With government spending expected to pick up in 2025 and the country widely seen as a beneficiary of President-elect Donald Trump’s trade tariffs on China, analysts expect the market to extend the streak to the new year.