Cash market turnover in first 7 mths of FY13 lowest in 6 yrs
According to data available on the exchanges, the average daily turnover during April-October (the BSE and the NSE combined) stood at R12,430.37 crore, the lowest since 2006. Experts attribute this trend to a sharp fall in retail participation — a result of policy paralysis at the Centre, coupled with the global economic uncertainties.
Andrew Holland, CEO, Ambit Investment Advisory, said the issues were not limited to the Indian shores. Even global markets witnessed a fall in the cash market turnover as the US, Europe, Japan and China saw economic growth suffer significantly. “It was not just the policy paralysis in India. Investors were risk averse to equities and, in a scenario where fixed income gave returns of 9-10%, it was the safest way for investors,” said Holland.
According to exchange data, the average daily cash market turnover was R13,700 crore during April-October FY12, R18,900 crore during April-October FY11 and R24,500 crore during April-October FY10.
Markets experts said excessive volatility in equity markets also hindered retail participation. Twice, when the Indian market neared its respective peaks achieved in early 2008 and late 2010, equity returns fell 50% and 25%, respectively, and shook investor confidence, they said.
“If you look at the last 3-4 years, there were so many scams that hit Indian politics.
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