Indians can now buy US stocks through Groww, Zerodha
What's the story
Groww is now allowing retail investors to invest in US stocks. The move comes as a response to the continued underperformance of the Indian market, giving investors a chance to diversify their portfolios. Groww launched its US equity trading service earlier this month, offering access to over 10,000 US stocks and ETFs.
Expansion plans
Other brokerages following suit
Zerodha, India's second-largest trading platform with a 15% market share of active clients, is also testing US stock access. The feature, currently in beta, will be launched in the coming weeks.
Angel One, another popular brokerage with 6.7 million active retail clients, is also said to be planning the launch of US stock trading on its platform.
Market trends
Latent demand for global companies
The growing interest among Indians in US stocks, especially tech companies, is evident.
Somnath Mukherjee, VP of Corporate Development at Zerodha, said there's always been a latent demand for global companies.
He attributed this trend to the Indian stock market's underperformance over the years and the absence of local AI champions.
Market comparison
Foreign investors pulling out of India
India's benchmark index, the Nifty 50, has fallen nearly 13% this year while the S&P 500 has gained over 12%.
This stark contrast is driving foreign investors away from India's markets.
A record $32.5 billion has been pulled out in direct equities since January, according to data from Indian depository NSDL.
Investment trends
Surge in outward remittances for equity investments
In August, Indian residents sent over $321 million abroad for equity and debt investments, a 111% increase from last year.
This investment now accounts for about 11.7% of total outward remittances, up from 5.8% a year ago.
The trend shows Indians are shifting from spending abroad to investing abroad, said Tanvi Kanchan of Anand Rathi Shares & Stock Brokers.