The average daily cash turnover on the exchanges in June touched an eight-month low as overseas investors turned net sellers and volatile markets continued to keep retail investors away.
The combined average daily cash turnover on NSE and BSE in June stood at R12,216 crore, 20% lower than the turnover clocked in January, which logged the highest average turnover of R15,308 crore in calendar year 2013. Market experts attribute the fall in volumes to the negative investor sentiment induced by the bearish market. ?While the volumes in the frontline stocks have not seen a drastic fall, it is the mid- and small-cap stocks where volumes have taken a beating. Traders are hesitant to sell these stocks as they have tanked and at current valuations they would not give any positive returns,? said AK Prabhakar, senior vice-president (equity research), Anand Rathi Financial Services.
The BSE barometer Sensex tanked more than 2% in June led by selling from foreign institutional investors (FIIs), who offloaded shares worth more than R9,000 crore during the month. The benchmark index slid despite seeing some support from domestic institutional investors (DIIs) who turned net buyers after 11 months and bought shares worth R8,500 crore.
Market experts feel that as the differential between closing levels and the next day’s opening levels has widened, investors are finding it difficult to take long or short positions. ?There is some value-buying taking place in the frontline stocks. But, the volatility in markets is also leading to panic selling among investors. The mid- and small-cap stocks have been under constant pressure due to margin trading,? said Alex Mathews, head (research), Geojit BNP Paribas Financial Services. The BSE Mid- and Small-cap indices plunged about 7% and 5%, respectively, in June.
As per data from Capitaline, small-cap stocks such as Shri Lakshmi Cotsyn, Emkay Global Financial Services and Winsome Diamonds And Jewellery saw a turnover of less than R1.5 lakh in the last month. Meanwhile, State Bank of India posted the highest average turnover of R426 crore in the last month, followed by ICICI Bank (R367 crore), United Spirits (R349 crore) and Reliance Industries (R322 crore).
