The combined cash market turnover on BSE and NSE fell to its lowest level in nearly one-and-a-half months on Wednesday. The turnover on Wednesday stood at Rs 9,653.49 crore, the lowest since January 1, 2014. The average turnover for the current calendar year is pegged at Rs 12,632.39 crore.
Market players attribute the low turnover to the range-bound movement of the benchmark indices, which have lost 3% in the current calendar year. “Nifty is trading in a range of 6,000-6,300 over the last four months. Volumes tend to dry off when markets trade within a range for a long time,” said Sahil Kapoor, chief technical analyst, Edelweiss Securities. “The participation is also low as traders don’t want to take fresh positions with the current financial year almost at its end,” he added.
In the current calendar year, the highest turnover was seen on January 30 at Rs 15,941.20 crore. With 13 sessions gone so far in February, the average turnover has dipped to Rs 11,497.16 crore. This is much lower than the average turnover in the last four months when it was over Rs 13,200 crore in each of the months.
Market players, however, continue to hold a bullish outlook. “Markets are consolidating in a range. This is a correction and there is no reason to panic. Investors remain bullish in the medim- to long-term," said Nirmal Jain, founder and chairman, India Infoline.
In recent days, global emerging markets (GEMs) have come under pressure owing to concerns over QE tapering. According to the latest edition of Bank of America Merrill Lynch’s Global Fund Manager Survey, emerging markets (EMs) have turned from being “safe” five years ago to becoming the biggest risk to financial market stability.
Fund managers are of the view that cash volumes are likely to remain subdued till elections. “Lack of a firm trend in macro-fundamentals is keeping sentiment and markets range-bound, possibly explaining the lower conviction levels and the lower volumes in the market. This is likely to continue till the elections,” said Lalit Nambiar, fund manager, UTI AMC.
The slowdown in volumes dragged the markets down on Thursday with the Sensex closing 186.33 points lower after gaining 529.62 points in the last four sessions.