Monsoon risk, young investor base and erratic trading activity define NSE outlook: NSE data

New Delhi: India’s 2026 macro outlook will depend on the performance of the monsoon, while the investor base is younger and more geographically dispersed and trading activity remains heavily concentrated among large investors, the National Stock Exchange said in its latest report.

The National Stock Exchange has flagged monsoon as a key macro risk for 2026. The NSE said the IMD has revised its southwest monsoon forecast to 90 percent of the long-term average, one of its lowest forecast values ​​on record, with a 60 percent chance of light rain and less than 4 percent more. “For 2026, the main challenge is the emergence of El Niño risk,” the report noted. All regions show a downside skew, with the highest below-normal rainfall probability in northwest India at 46 percent, southern peninsula at 45 percent, and central India and the monsoon core zone at 43 percent. The NSE said a historic El Nino year warrants caution, with deviations from -5.4 per cent in 2023 to -22.1 per cent in 2002, and inadequate rainfall has historically affected kharif sowing, reservoir levels, rabi production and food inflation.

On investor demographics, NSE said the nature of growth is changing as penetration expands beyond traditional big-market states and the profile becomes younger and gradually more gender-diverse. By May 2026, the registered investor base had grown to 13.1 crore, with the last crore additions taking about seven months. Aggregate base grew at 25.3 percent CAGR during FY21-FY26 as compared to 16.3 percent CAGR during FY16-FY21. Regionally, North India now accounts for the largest share at 36.7 percent, surpassing West India in 2022. States outside the top 10 now account for ~22 per cent against 27 per cent in FY17, “pointing to the gradual expansion of the investor base outside the traditional large states,” NSE said.

The investor base also tends to be young. The share of registered investors under the age of 30 increased from 23.5 percent in March 2020 to 38.3 percent in May 2026, while the average age fell from 38 years to 33 years. With investors under 30 accounting for 53-59 percent of new registrations, incremental additions remain small. Women’s participation has steadily improved, with women accounting for nearly 25 percent of all individual investors by April 2026.

However, trading activity remains skewed. NSE data for May 2026 shows that the top 2.6 percent of active cash market investors accounted for 92.3 percent of the turnover, with Rs. Investors trading Rs 10 crore and above are only 0.3 per cent of active investors but contribute 79.4 per cent of the turnover. In equity options, the top 0.3 percent of investors account for 69 percent of premium turnover alone, while the top 7.8 percent in equity futures account for 93.3 percent of turnover.