 "Cash market turnover jumps 50% since Feb")
The cash turnover in the equities segment has seen a substantial increase in recent months, suggesting the current market rally has attracted investors. The average daily turnover in the cash segment rose to Rs 17,738 crore in April, 50 per cent more than the Rs 11,726 crore in February.
During this period, the benchmark indices—-the BSE Sensex and NSE Nifty—-have gained 11 per cent each. Terming it a “pre-election rally”, market participants say the rise in share prices has been fuelled by expectations a stable government will come to the Centre after the election results are announced on May 16. Markets are expecting a Bharatiya Janata Party-led government to come to power, with Narendra Modi, considered business-friendly, as prime minister.
The jump in trading volumes has been led by an increase in trading activity in non-large-cap stocks. The contribution of blue-chip Sensex stocks to the total cash turnover has fallen to 30 per cent from 40 per cent at the beginning of the year. Experts said the valuation gap between large- and small-cap stocks had been attracting investors to these counters. “The movement in the mid- and small-cap stocks is very evident. In terms of absolute performance, these stocks have not risen much and perhaps, we could see some more upside in these,” said Mayuresh Joshi, vice-president and head (institutional sales), Angel Securities.
Between February and April, stocks in the mid- and small-cap segment have risen 17-20 per cent each. Market analysts said the surge in mid- and small-cap segment stocks was an indication of the return of retail investor confidence. Typically, retail investors are known to take exposure in mid- and small-cap stocks.
“Retail investor cash volumes have risen 20 per cent to about Rs 8,000 crore in the last two-three months. While we are not seeing too many new investors, it is a very encouraging sign,” said Sudhakar Ramasubramanian, managing director, Aditya Birla Money.
“For many of these companies, there has been no fundamental change. Basically, much of the rise we have seen so far is liquidity-driven buying in the market,” said Gauranga Shah, assistant vice-president, Geojit BNP Paribas Financial Services.
Analysts are concerned retail investors could stare at heavy losses if the markets do not hold up after the election results are announced on May 16.
During this period, the benchmark indices—-the BSE Sensex and NSE Nifty—-have gained 11 per cent each. Terming it a “pre-election rally”, market participants say the rise in share prices has been fuelled by expectations a stable government will come to the Centre after the election results are announced on May 16. Markets are expecting a Bharatiya Janata Party-led government to come to power, with Narendra Modi, considered business-friendly, as prime minister.
The jump in trading volumes has been led by an increase in trading activity in non-large-cap stocks. The contribution of blue-chip Sensex stocks to the total cash turnover has fallen to 30 per cent from 40 per cent at the beginning of the year. Experts said the valuation gap between large- and small-cap stocks had been attracting investors to these counters. “The movement in the mid- and small-cap stocks is very evident. In terms of absolute performance, these stocks have not risen much and perhaps, we could see some more upside in these,” said Mayuresh Joshi, vice-president and head (institutional sales), Angel Securities.
Between February and April, stocks in the mid- and small-cap segment have risen 17-20 per cent each. Market analysts said the surge in mid- and small-cap segment stocks was an indication of the return of retail investor confidence. Typically, retail investors are known to take exposure in mid- and small-cap stocks.
“Retail investor cash volumes have risen 20 per cent to about Rs 8,000 crore in the last two-three months. While we are not seeing too many new investors, it is a very encouraging sign,” said Sudhakar Ramasubramanian, managing director, Aditya Birla Money.
“For many of these companies, there has been no fundamental change. Basically, much of the rise we have seen so far is liquidity-driven buying in the market,” said Gauranga Shah, assistant vice-president, Geojit BNP Paribas Financial Services.
Analysts are concerned retail investors could stare at heavy losses if the markets do not hold up after the election results are announced on May 16.