The number of active users on the National Stock Exchange (NSE) fell to 31.2 million in April from 32.7 million in March, the tenth consecutive month of decline.

Brokerage Motilal Oswal said in a report that the decline was more pronounced in April, with a decline of 1.5 million accounts compared with 900,000 accounts in the previous month.

The stock exchange defines active users as those who have made at least one transaction in the past year. This figure does not include new additions.

Experts pointed out that market participation is affected by the uncertain economic environment, sluggish one-year returns, and declining enthusiasm of retail investors, which has led to a continuous decline in the number of active participants since July 2022.

Over the past nine to ten months, the Indian stock market has experienced a wide range of sideways movement. There is a lot of volatility, which often results in newer players who typically enter the market with smaller capital being wiped out.

It is difficult for them to accurately predict the direction of the market, and they end up losing money.

In FY23, the 30-pack Sensex gained 0.7%, while the broad-based Nifty fell 0.6%. The BSE small and mid-cap indices fell 0.18% and 4.46% respectively.

Foreign investors sold $6.64 billion worth of shares in FY23, compared to $17.06 billion in FY22.

Another contributing factor has been the challenging environment for options sellers in recent months due to volatility.