India’s traders became data-first in 2025. How will it shape 2026?

2025 has emerged as a game-changing year for the Indian stock market. The stock market narrative, often described as “sentiment-driven”, has witnessed a clear shift. Retail participation is expected to touch 19.4 crore in 2025, led by tech-savvy Gen Z investors and evolved traders who rely on data rather than sentiment.  Traders and brokers have further embraced structured insights and data-led signals helped the Indian stock market to mature and become resilient. This palpable shift, however, did not arrive suddenly. Years of repeated market cycles and the effective use of data across platforms brought a calmer and deliberate participation from all stakeholders. That is likely to influence market behaviour well into 2026.

Today's retail ecosystem is not characterised by a single set of investors or traders. Diversity is the name of the Indian stock market game today. The market now includes active traders, traders who have paused participation, long-term investors, dormant account holders, and first-time entrants. Each of these cohorts shows different market behaviour and is characterised by distinct risk expectations. They should not be treated as a single audience, as that perception will no longer work. What is interesting is that most of them, including investors, both short-term and long-term, are increasingly prioritising speed, UI (user interface), and UX (user experience) over pricing, and this is indeed a welcome change.

A closer scrutiny of the 2025 market behaviour shows that data-led cohort identification has enabled more relevant engagement of all categories of market players. The active traders have responded well to risk and margin-related nudges in accordance with their trading behaviour. Participants, who had stayed from the markets, got re-engaged again, and first-time investors were able to make informed decisions as they benefited from guided journeys that helped them to understand the market before they executed. In the process, this approach improved the quality of participation and not just increased the numbers—a sign of a mature stock market.

The advent of digital-first platforms over the past few years has redefined how investors access mutual funds. These platforms draw in tech-savvy individuals while extending their reach to previously underserved segments in Tier II and III cities. These platforms simplify investment journeys with features such as goal-based investing, real-time portfolio tracking, and personalised recommendations, empowering investors to make informed and independent decisions. Broking houses that distribute mutual funds have consistently embraced technology to provide SIP reminders to the investors regularly and built a fiscal discipline among them. With monthly SIP inflows now exceeding ₹29,000 crore, the success of this tech-enabled model has worked well and has resulted in a sustained investor behaviour rather than sporadic bursts of excitement.

The fiscal discipline among investors is now extending to more sophisticated investment products like PMS and AIF. Customer analytics has played an important role in the adoption of these products, which demand higher financial acumen, longer investment horizons, and a clear understanding of the variable nature of returns on investments. Data-led insights helped ensure that participation was driven by suitability rather than broad-based promotion, resulting in India's alternative investor sector booming with PMS and AIF now managing over ₹23.43 lakh crore corpus.

In the evolving landscape of Indian financial markets, a new acronym has emerged in 2025—Specialised Investment Fund (SIF)—that has brought in institutional-grade flexibility to investors with a ₹10-lakh entry point. For the Indian investors, SIF enables access to absolute return strategies, aiming for positive returns regardless of whether the main indices are up or down, and that too, at a fraction of the cost and entry barrier to AIF.  Indian investors are gradually warming up to SIFs, and 2026 can see more mid-segment investors parking money in this product, as technology-driven engagement has helped them to understand these structures clearly, leading to more informed decision-making.

As Indian households increasingly prefer financial assets over traditional physical assets like real estate and gold, the process of financialisation of savings is expected to deepen in India. Equity-linked investments, which have already grown significantly as a proportion of savings, will further accelerate, and the Indian tech-savvy data-driven investors will also venture into other alternative investment products, such as SIF, for example. Data transparency that reflects clear performance reporting, portfolio insights, and risk metrics will drive this new wave of financialisation and will simultaneously create confidence through the market cycles that may sometimes turn choppy due to various factors.

 If we look back, we can see that the retail market in 2025 remained more composed despite volatile phases accentuated by geopolitical factors, trade tariffs, a weak rupee, and many external factors. Retail participation remained strong, also aided by IPO heavy year, and there were hardly any major knee-jerk reactions among the retail investors. Traders also played their role by complementing their experience with analytics. Speculation is prevalent in all markets across the globe, and India is no exception. But despite speculation, the overall quality of engagement of market participants improved in 2025. 

2025 stands out as the year when India's retail investors and traders became more data-first. As we look to 2026, this behavioural maturity will further expedite, leading to investors seeking more intelligent and context-driven platforms that help them to manage risk, interpret information, and take informed decisions with long-term investment goals that can ensure better returns for them. While analytics will play a bigger role in influencing the investment behaviour, it should also ensure suitability and clarity in the first place. Technology should facilitate better investment decisions and not encourage any short-term, quick gains that are detrimental to the development of the Indian stock market.

(The author is the managing director of BlinkX by JM Financial Ltd. Views are personal.)