Even though the Indian equity market is again inching towards all-time high, Zerodha’s CEO Nithin Kamath does not feel it like a bull run. This is because, according to him, the retail activity is not picking up and is unlikely to rise amid high interest rates.

Even though the Indian equity market is again inching towards all-time high, Zerodha’s CEO Nithin Kamath does not feel it like a bull run. This is because, according to him, the retail activity is not picking up and is unlikely to rise amid high interest rates.

“Markets are back at all-time highs, but it doesn't feel like a bull run because retail activity isn't picking up. Active clients on NSE, Google & social media trends are way below all-time highs. Unlikely that activity will pick up given the higher interest rate environment," Kamath wrote on Twitter.

“Markets are back at all-time highs, but it doesn't feel like a bull run because retail activity isn't picking up. Active clients on NSE, Google & social media trends are way below all-time highs. Unlikely that activity will pick up given the higher interest rate environment," Kamath wrote on Twitter.

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Kamath shared a graph showing a sustained decline in NSE active clients since June 2022. As per NSE, active clients are those who have traded once in the past twelve months.

In another graph, Kamath showed investors’ falling interest over time with the declining trend for the search of words Nifty 50 and BSE Sensex on Google.

According to Google Trends, Nifty 50 and BSE Sensex showed heightened interest during early 2020, the period of COVID-19 lockdown, when there was an upsurge in retail investors’ activity who rushed to the equity market as they were confined to their homes.

Moreover, Kamath also said that high interest rates offered by low-risk investment options such as bank’s fixed deposits were luring retail investors who would not wish to take additional risk in the market.

“I keep telling our team that our competition is really the bank's fixed-deposit rates, not our peers. Most retail investors question whether taking the added equity risk is worthwhile when govt bonds and FDs yield 7%+," he said.

The Indian equity market has remained volatile since the beginning of this year. The domestic equities fell sharply in the first three months, but showed a decent recovery since April on the back of revival in FII flows and resilience in Indian economy.

On Friday, the benchmark equity indices ended at their all-time closing high. The Sensex closed 466.95 points, or 0.74%, higher at 63,384.58, and the Nifty ended at 18,826.00, up by 137.90 points, or 0.74%.

The Sensex hit an all-time high of 63,583.07 on December 01, 2022, while the Nifty hit its life-time high of 18,887.60 on the same day.