New Delhi, Sept. 19 -- Fewer retail investors making direct trades in India's stock market can broadly be explained by red ticker tapes and price volatility having sent individual participants into the relatively safe arms of mutual funds (MFs). Almost a year on, key market indices are yet to recover the peaks they hit in 2024.

Data from the National Stock Exchange (NSE) shows that its active retail traders-who trade stocks at least once a month-dropped from a record 15.7 million last September to 10.7 million at the end of August.

Separate numbers show that India's count of unique MF investors went up from about 50.1 million to almost 56.4 million over roughly the same period; this includes big-entity MF holders too, but was probably d...