Monsoon risk, younger investor base, and skewed trading activity define NSE outlook: NSE data

New Delhi: India’s 2026 macro outlook will hinge on monsoon performance, while the investor base continues to get 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 flagged the monsoon as the key macro risk for 2026. NSE said IMD has revised its South-West monsoon forecast to 90 per cent of the long-period average, one of its lowest forecasted values on record, with a 60 per cent probability of deficient rainfall and a further 24 per cent probability of below-normal rainfall. “For 2026, the key challenge is the emergence of El Nino risk,” the report noted. The downside skew is visible across regions, with the probability of below-normal rainfall highest in Northwest India at 46 per cent, followed by the South Peninsula at 45 per cent, and Central India and the Monsoon Core Zone at 43 per cent each. NSE said historical El Nino years warrant caution, with deviations ranging from -5.4 per cent in 2023 to -22.1 per cent in 2002, and deficient rainfall has historically impacted kharif sowing, reservoir levels, rabi production and food inflation.

On investor demography, NSE said the nature of growth is changing as penetration broadens beyond traditional large-market states and the profile becomes younger and gradually more gender-diverse. The registered investor base rose to 13.1 crore as of May 2026, with the last crore of additions taking about seven months. The overall base grew at a 25.3 per cent CAGR during FY21-FY26 compared with 16.3 per cent CAGR during FY16-FY21. Regionally, North India now accounts for the largest share at 36.7 per cent, having surpassed Western India in 2022. States outside the top 10 now account for 27 per cent vs ~22 per cent in FY17, “pointing to a gradual broadening of the investor base beyond the traditional large states,” NSE said.

The investor base is also trending younger. The share of registered investors below 30 years increased from 23.5 per cent in Mar 2020 to 38.3 per cent in May 2026, while the median age fell from 38 years to 33 years. Incremental additions remain even younger, with investors below 30 accounting for 53-59 per cent of new registrations. Female participation improved steadily, with women accounting for around 25 per cent of all individual investors as of Apr 2026.

Trading activity, however, remains skewed. NSE data for May 2026 showed the top 2.6 per cent of active cash market investors accounted for 92.3 per cent of turnover, with investors trading Rs 10 crore and above forming just 0.3 per cent of active investors but contributing 79.4 per cent of turnover. In equity options, the top 0.3 per cent of investors alone accounted for 69 per cent of premium turnover, while in equity futures the top 7.8 per cent accounted for 93.3 per cent of turnover.