Why Surging Household Wealth Is Good News

Individual investors are the largest group in the stock market after promoters.

- RAJAS KELKAR

The latest data published in the National Stock Exchange monthly bulletin reveals that individuals account for 9.8% of the market directly and 18.2% when their mutual fund share is added. "Individuals thus own more of the Indian markets than FPIs—the first time since 2006," the bulletin states.

That is good news for the depth of the Indian capital markets, which can stay relatively calm even if foreigners continue to exit.

The other interesting factor is about the household wealth. It has increased rapidly and can significantly affect India's future stock market wealth and consumption. It is now estimated at ₹79.6 lakh crore, growing at an average 10-year rate of 21.3%. It is just under $1 trillion, which is way higher than $500bn worth of Indian equities owned by foreign portfolio investors.

Predicting human behaviour is like predicting the rains. Despite a lot of data and information, it is hard to determine future actions. Factors beyond the standard data now affect the weather and us. Stock market trends are hard to predict, too.