Notwithstanding the unabated West Asia war and its subsequent gloom on economic growth, retail investors seem to be betting big on equity investments with a cautious approach.
The average daily turnover (ADT) in the cash equity market segment on and in March hit a 19-month high and was the highest-ever in FY26 as investors used every sharp dip in equity markets to average their investments.
The ADT in the cash market on NSE jumped 10 per cent in March to ₹1.25 lakh crore against ₹1.14 lakh crore in February.
In BSE, the cash segment ADT increased 8 per cent to ₹9,375 crore against ₹8,692 crore in February.
The benchmark indices and last month tumbled 10 per cent, registering their worst performance since the Covid pandemic. The crash was driven by rising geopolitical tensions, surging oil prices and intense FPI selling.
In absolute terms, the cash market turnover was a tad lower in March at ₹23.78 lakh crore against ₹24.08 lakh crore in the previous month as the number of trading days last month was lower at 19 against 21 in February.
Mixed bag
In FY26, the ADT in the equity cash segment on NSE dropped 6 per cent to ₹12.68 lakh crore against ₹13.56 lakh crore in FY25 amid unprecedented volatility. In the same period, BSE recorded a 3 per cent increase in ADT at ₹95,671 crore (₹93,200 crore).
Shweta Rajani, Mutual Fund Head, Anand Rathi Wealth, said the rise in ADT has more to do with heightened volatility when market activity tends to increase as investors realign their portfolios and reassess risk exposure.
Despite volatility there are expectations that SIP inflows in March will also see consistent net inflow in equity MFs, she said.
The retail investor approach seems more balanced, with reduced direct equity exposure and preference for staggered investing through diversified equity mutual funds, added Rajani.
Hariprasad K, Research Analyst and founder, Livelong Wealth, said on every dip in market retail investors are stepping in selectively where they see value emerging but there are element of risks, particularly in the small-cap space where their participation remains elevated.
The upcoming large IPOs such as Jio and NSE could attract new investors into the market and bring in incremental liquidity, especially from first-time participants looking for quality, well-known businesses.
Ponmudi R, CEO, Enrich Money, said with over 25 crore demat accounts, the retail base is structurally strong, but only about 4–5 crore investors are consistently participating in delivery-based investing.
In an environment where corporate earnings visibility is uncertain due to global headwinds, retail investors are active but not fully committed, he said.