The volatility in the Indian markets on Monday, which saw the Sensex crash 357 points in intra-day trade, led to a cascading upswell of stop losses getting triggered for the second consecutive day after last Friday?s fall. Price fluctuations of 5-10% were seen in several scrips, including some large caps.

However, this time around, the losses to brokerages would not be significant as they were at the time of the last fall in early December when Sebi had barred a few companies and their promoters from trading on the bourses. ?That is because very few individuals have any meaningful positions and investors are operating with strict stop losses,? said Gagan Randev, CEO, Religare Securities.

Said Prashant Prabhakaran, head of retail broking at India Infoline, ?HNIs have been continuously selling and lightening their positions because they believe the markets are likely to be weak for some time. So, brokerages are likely to have a tough time for the next three months or so with volumes remaining steady at the current levels of about Rs 1 lakh crore.?

However, the serious fall in volumes in the cash market which is way below that seen in September and October last year, and lacklustre participation of retail investors continues to hurt brokerages.

Several clients who had booked losses in the mid-cap crash of November 2010, are yet to pay their dues. ?Losses at that time were significant and brokerages are worried about how and when the payment will come,? said a senior executive of a leading brokerage house. With both high net worth individuals and smaller investors pretty much out of the market, NBFCs, which lent heavily during September and October last year, have restricted their margin funding activity. As such clients have refrained from building up leveraged positions. ?There is very little demand from clients for margin funding. Both brokers and clients have become more conservative,? said SA Narayan, executive director at Kotak Securities.

Retail turnover in the cash market has fallen substantially over the past three months and is now much lower than what it was in September last year. The daily average turnover in the overall cash market on the National Stock Exchange (NSE), in September, was Rs 15,708 crore. For January, the daily average turnover has been Rs 13,366 crore.

?Participation from non-institutional clients is very limited. Retail investors have been cautious because the market is trading with a negative bias,? said Narayan.

Even high net worth individuals have become reluctant to take major bets. So much so that HNIs are still not actively bottom fishing even after the significant correction seen over the past week, according to Kedar Deshpande, business head for retail broking at Edelweiss Securities.

Deshpande said investors have become especially jittery since the market has breached the 200 (daily moving average) DMA.

According to Sebi data, FIIs have sold shares worth $1.19 billion this year so far. They were heavy sellers on Monday, offloading shares worth Rs 920 crore, BSE?s provisional figures show.