In May, new demat account openings reached a nine-month high

May saw the largest increase in new demat account openings in nine months, driven by a recovery in the overall market and record derivatives volumes. As per a mint report, the overall number of demat accounts stood at 118.15 million, up 2.15 million or 32% from April.

This was the largest monthly growth since August when new account additions rocketed up 73% or 2.55 million, said the report citing depository data published by Motilal Oswal Financial Services.

As of May 31, 86.16 million accounts were held by Central Depository Services (India) Ltd, and 31.99 million accounts were held by National Securities Depository Ltd.

The market regulator has its work cut out for it trying to safeguard novice investors given the rush for demat accounts that goes along with the influx of retail capital into the riskier futures and options (F&O) segment.

Brokers are required by Sebi to inform investors that nine out of ten traders who bet on Nifty and Bank Nifty options lose money.

The increase in demat account openings is attributed by analysts to retail investors' renewed interest in the Indian equity markets as a result of the rally seen over the previous two months. The Indian markets enjoyed a rebound in optimism after a period of sluggishness brought by global attitudes