With markets trading in a range and investors lacking clarity on the longevity of their ascent, average delivery volumes have dropped to a 14-month low.

According to Bloomberg data, the share of delivery-based transactions in the total turnover dropped to 38.47% in April. This is the first time since June 2012 that the share has fallen below 40%.

Delivery volumes refer to trades that result in the buyer taking delivery of the shares. A fall in the delivery volumes is typically looked upon as a signal of falling confidence level of investors. In such a scenario, investors indulge more in day-trading.

In February 2012, delivery volumes had dropped below 40% and remained in the sub-40% range as fears of euro-zone contagion risk had resulted in widespread profit booking in the markets — not only in India, but also globally.

Experts say investors are growing less confident about the market due to high volatility and are choosing to place short-term bets. The drop in delivery volumes further indicates that retail investors have disappeared from the market and have made way for traders and speculators, they say.

?The drop in delivery volume is an indication of low retail participation. Retail investors have shunned the market due to fear of capital erosion. They fear buying stocks given their poor experience in certain mid- and small-cap stocks where huge losses have been incurred due to poor corporate governance practices in these companies? said K Sandeep Nayak, ED & CEO, Centrum Broking.

Nayak explained that a lot of volumes has shifted to index options, which is a cheaper instrument to trade in the equity market as it does not attract any charges and transaction tax. However, tweaking or lowering security transaction tax (STT) will have minimal impact on bringing retail investors back to market, he said.

Experts also attributed the drop in delivery volumes to the investors’ increasing comfort of placing intra-day bets and taking a short-term view on the markets.

In addition, the mutual funds route, through which many retail investors participate in equity market, is seeing redemption pressure as investors are exiting in large numbers.

Delivery volumes last month stood at a record 45.67% as a 6% market fall since the highs of January prompted clients to indulge in value buying.