If you have looked at the performance of the NSE Nifty in 2025, you will think that the Nifty has barely moved in the year. It is hovering around the same level as at the start of the year. However, if you observe the market trend regularly, you will see that February 2025 began with a sharp selloff. There were concerns of doom, stagflation and trade wars. The picture flipped in March 2025. Share prices have mostly recovered from those lows to the level they were at the start of the year.
The trend in the stock market is an eye-opener for both active and passive investors. Many of you could be new to the stock market. The market activity could have tested your temperament as an investor. Many of you would have contemplated exiting the market when prices were falling. You could have wondered why foreign portfolio investors were selling Indian shares, and the value of the rupee was losing ground against major currencies.
As we moved into March, there was euphoria. Share prices have revived, and those who sold quickly could wonder about not showing patience.
A lot of you jumped into investing after the COVID-19 pandemic. The latest data from the National Stock Exchange shows that the unique Permanent Account Numbers or PAN associated with the exchange, or the depository, rose to 11.1 crore in 2024-25 from 3 crore in 2019-20. The latest NSE Data said that we now have about 3.69 crore people who have traded on the National Stock Exchange at least once yearly. That is a significant jump from 2020.
However, the spread of the investment cult is concentrated in metro areas. States like Maharashtra and Gujarat dominate equity and derivative trading regarding the number of accounts and average turnover. Cities like Mumbai and Delhi and the surrounding areas seem to be brimming with people interested in investing and trading.
The culture of investing through mutual funds is still mainly concentrated in Western India. The latest data for mutual fund assets under management or AUMs split by region shows Maharashtra accounting for almost a third of all equity assets managed by mutual fund funds. Gujarat is a distant second, followed by Karnataka and Delhi NCR.
The above data suggests minimal emphasis on learning about investing. Most of you who entered the market were and probably still are rushing to get rich quickly. To be a successful investor, you need to observe market trends for a bit longer than act instantly. You can start by investing through passive index funds as a first step. Then, move on to becoming an active investor.
The Nifty movement trend in February and March 2025 demonstrates that share prices can fall sharply due to sentiment. However, as clarity emerges on the issues that caused the negative sentiment, share prices tend to recover, too.
With various investors making a play for Indian equities, there is a phase of volatility. Foreign investors thought in February 2025 that Indian equities were expensive compared to Chinese shares. They sold heavily and bought Chinese shares. However, by March 2025, the valuation of Indian shares turned reasonable, and the intensity of their selloff diminished. Indian investors continued to support domestic equities through systematic investment plans. However, since 75% of the mutual fund equity money is in active funds, many Indian fund managers have expanded the cash holding in their portfolio. A lot of money is waiting on the sidelines to enter the market.
The above information is not something only this writer can find. The data is available for all to see and use. Your knowledge is your weapon against market volatility. It will guide you to win in the world of investing.