When the stock markets were trading at an all-time high early last year, investors who remained optimistic about the prospects of the Futures market took big positions, increasing the overall delivery ratio. However, with extreme volatility gripping the markets subsequently, investors started disappearing from the scene, resulting in a sharp fall in delivery-based volumes.
And with the equity benchmark indices continuing to slide (the BSE's Sensitive index – Sensex – has tanked from its over 21,000 level in January 2008 to 8,800 levels currently), there's no change in this state of affairs.
In the just concluded month of February, the combined delivery-based volumes on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) accounted for only 29.40 per cent of total traded volume as against 44.98 per cent clocked in January 2008. This translates into a drop of 62 per cent drop in delivery shares, even as total volumes declined by only 42 per cent.
BSE itself saw delivery volumes come down to 31.95 per cent in February 2009 from an average of 52.31 per cent in January 2008. NSE also witnessed a sharp fall in delivery-based volumes, sliding to 28.21 per cent last month from 40 per cent registered in January 2008.
Even the BSE Sensex companies could not escape the turmoil, with deliveries in their scrips falling by 24 per cent. While gross deliveries of Sensex stocks stood at 27.55 per cent of the total traded volume in February as against 29.14 per cent in January 2009 and 50.41 per cent in January 2008.
In absolute terms, the deliveries in the Sensex stocks dipped by 2,190 lakh shares to 7,030 lakh shares in February 2009 from 9,220 lakhs shares in January 2009. This dip in deliveries within the space of a month implies a lack of confidence by investors in the direction of the market.
While non-Sensex stocks proved to be major volume drivers with their delivery-based volumes zooming to 36.20 per cent of total traded volumes, even these scrips saw a fall of 17.38 per cent when compared to January 2009.
Of the 30 companies that make up the Sensex, Reliance Infrastructure, DLF, Tata Steel, Reliance Industries, Jaiprakash Associates and Reliance Communications had a delivery ratio of less than 25 per cent in February this year. Deteriorating delivery volumes were seen in Jaiprakash Associates, Reliance Communications, ITC, Wipro, Bharti Airtel and Tata Power. In fact, delivery volumes in Tata Power counter saw the highest decline of 54.56 per cent in February 2009.
