First-time investors seen aiding stock market surge

In FY21. more than 14 million new demat accounts were opened, almost thrice the previous year’s 4.9 million accounts

A good part of the Indian stock market’s rally over the past 14 months, even as the COVID-19 pandemic has shrunk economic activity and left millions without jobs, has been fuelled by a jump in first-time investors, according to equity analysts. The widening disconnect between the equity market and the ground reality of strict lockdowns across most of the States and tens of thousands of deaths has done little to deter these investors who appear to have been drawn by the lure of quick returns. The S&P BSE Sensex, which gained almost 2% to close at 50,540.48 points on Friday, has almost doubled since its pre-national lockdown low of 25,981.24 points on March 23,2020, having surged 94.5%.