This is because, with every successive rise and fall in the Sensex, trading volumes have sharply declined.The pace of every successive rise and fall has been faster than the previous one with the volume and value falling each time. Market experts are of the view that the bourses are witnessing selective participation, as is evident from the markets moving up on lower volumes.
Arun Kejriwal, director, KRIS, said, Post-rally, most of the participants have liquidated their positions in derivatives and, at the same time, there is a reluctance in making fresh commitments leading to a hollow market. The 30-share Sensex of the Bombay Stock Exchange (BSE) Ltd moved from 7,200 to 8,800 in 63 trading sessions between July 1-Oct 4, 05. The daily average trading volume (number of shares traded) during the period was pegged at 40.14 crore shares. The average turnover during the period on BSE was Rs 3,477.11 crore.
The swift rise was followed by a faster fall that brought the index at 7,600-levels in just 18 trading sessions between Oct 4-28. The average daily volume and turnover during the period on BSE dropped sharply to 18.33 crore shares and Rs 2,996.42 crore.