An analytical Study on Awareness of Stock Market Instruments and the Role of Information Sources among Retail Investors in Uttar Pradesh

Abstract

The Indian stock market is witnessing a large influx of retail investors, thanks to the digital age and the availability of trading platforms. There has been a concern regarding the extent to which retail investors are aware of financial products and the quality of their decision-making skills based on the information they receive about financial products. Data show that while participation has grown, this doesn't guarantee adequate knowledge. Therefore, this study will look at how well retail investors in Uttar Pradesh know about stock market products as well as analyse how various sources of information affect their awareness level. The primary data collected from 230 retail investors. Different statistical methods such as chi-square test, one-sample t-test, and multiple regression analysis. The reliability of the measurement scales was confirmed using Cronbach’s alpha. The findings indicate that retail investors possess high awareness of low-risk, traditional investments. And possess reasonably satisfactory levels of awareness regarding mutual funds and ETFs. However; awareness level for high-risk/complex investment instruments such as derivatives and foreign exchange remains low for many retail investors. Results show that information sources; including social media, AI-based applications; peer groups; and digital media positively contribute to an investor's awareness; whilst traditional brokers and independent financial advisor only modestly contribute to an investor's awareness of investments. An overreliance on AI-generated insights is found to negatively affect independent understanding.