Millennials look for relief in stocks
MUMBAI: Millions of young Indians are dabbling in stocks for the first time as they remain stuck at home, with many of them trying their hands at trading shares to boost income amid pay cuts and job losses.
Securities and Exchange Board of India (Sebi) data showed that investors opened a record 2.4 million demat accounts in the three months to June 30, or 5.6% of the total number of such accounts, reflecting the growing retail participation in stock markets. In the six months ended June, 3.9 million accounts were added, totalling 43.2 million.
Many of these new investors were lured into trading by the sharp plunge in stock values after the lockdown was announced in end-march, hoping to make a quick buck as share prices rebound. Others took to day-trading, hoping to supplement incomes as they had either lost their jobs or had to take pay cuts as companies slashed costs amid the pandemic. “We are seeing a huge fear of missing out among retail investors. There were a lot of investors who missed the rally from the demonetisation lows. However, the latest fall has presented an opportunity for these investors,” said Jimeet Modi, founder and chief executive of brokerage Samco Securities. “Lockdowns and working from home have resulted in people having a lot more time compared with pre-covid times, contributing to increased investor interest.” While some market experts have warned that the current stock valuations are hard to justify and near bubble territory, retail investors seem to be unperturbed by the worries around
Covid and its fallout on earnings. Experts attributed the more-than-45% surge in stocks since hitting the lows of March to high retail interest as well as excess liquidity.