Stock delivery volumes on NSE, BSE drop to lowest since 2009
Nov 02, 2018, 07.46 AM IST
High trading volume seems to be driving the stock market amid a significant fall in the delivery of stocks. The three-month rolling combined delivery of stocks on the BSE and the NSE has dropped to 34.5 per cent of the total transactions, the lowest since 2009, according to Bloomberg data. A year-ago, the delivery percentage was 40 per cent while the 10-year average delivery was 42 per cent. The delivery percentage has been consistently falling on the Indian bourses in the past two years amid rising stock valuations. On the other hand, the three-month combined cash turnover reached Rs 44,280 crore, 155 per cent higher than the 10-year average.
The participation of the foreign portfolio investors and mutual funds have been muted in the past two years. They accounted for 16 per cent and 8 per cent, respectively, of total turnover on the stock exchange. The holding of the retail in the BSE 200 stocks has been over 8 per cent since June 2015. This means the increase in the benchmark indices over the past two years has been supported by trading volume.
Historically, during a market fall, midcaps and the Bank Nifty underperform. However, this trend was reversed during the recent decline. Market observers believe that the dropping delivery percentage has been a prime reason for midcap stocks and the Bank Nifty index to outperform the benchmark Nifty 50 since August 28 — when the Nifty recorded a high of 11,700 — as investors held on to their positions when a bout of market fall began.
https://economictimes.indiatimes.co...to-lowest-since-2009/articleshow/66469868.cms
Nov 02, 2018, 07.46 AM IST
High trading volume seems to be driving the stock market amid a significant fall in the delivery of stocks. The three-month rolling combined delivery of stocks on the BSE and the NSE has dropped to 34.5 per cent of the total transactions, the lowest since 2009, according to Bloomberg data. A year-ago, the delivery percentage was 40 per cent while the 10-year average delivery was 42 per cent. The delivery percentage has been consistently falling on the Indian bourses in the past two years amid rising stock valuations. On the other hand, the three-month combined cash turnover reached Rs 44,280 crore, 155 per cent higher than the 10-year average.
The participation of the foreign portfolio investors and mutual funds have been muted in the past two years. They accounted for 16 per cent and 8 per cent, respectively, of total turnover on the stock exchange. The holding of the retail in the BSE 200 stocks has been over 8 per cent since June 2015. This means the increase in the benchmark indices over the past two years has been supported by trading volume.
Historically, during a market fall, midcaps and the Bank Nifty underperform. However, this trend was reversed during the recent decline. Market observers believe that the dropping delivery percentage has been a prime reason for midcap stocks and the Bank Nifty index to outperform the benchmark Nifty 50 since August 28 — when the Nifty recorded a high of 11,700 — as investors held on to their positions when a bout of market fall began.
https://economictimes.indiatimes.co...to-lowest-since-2009/articleshow/66469868.cms