Despite the stock market's continued volatility, Finance Minister Nirmala Sitharaman said on Tuesday that retail investors appear to act as shock absorbers, even when foreign portfolio investors leave.

Addressing a corporate affairs ministry event as part of the Azadi ka Amrit Mahotsav, the finance Minster said that there has been a considerable increase in retail investor numbers during the pandemic.

"Retail investors have come in such a significant way that they seem to act as shock absorbers... if Foreign Portfolio Investors went away, our markets didn't have to express their ups and downs in such a clear way since small investors in the country have come in such a big amount," she said.

The Central Depository Services (India) Ltd announced in March that the number of active Demat accounts it had opened had surpassed six crores.

The stock market has been volatile in recent months, with foreign portfolio investors (FPIs) selling aggressively in response to tightening monetary policy steps aimed at containing increasing inflation and geopolitical tensions.

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