Sept delivery volumes touch 2012 high on equity mkt rally
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As a result of a sharp rally in the equity market, the share of delivery volumes in September touched the highest for the current year. According to data compiled by Sebi, little over 32% of shares traded in the cash segment of NSE and BSE resulted in delivery.
Market experts attribute this leap in delivery volumes to improved market sentiment as a more than 6% gain in the benchmark indices resulted into increased participation by both the Institutional as well as retail investors.
As per B Gopkumar, EVP & head of broking, Kotak Securities the rise in delivery volumes was primarily due to substantial buying in the front-line stocks, also by the retail investors.
"After the initial jump in the market, many traders who felt left out joined the rally, adding to delivery volumes. Some investors also exited their positions, held since more than a year, as the market gains gave an exit window," he added.
According to estimates, there was over 20% jump in the non-institutional participation in the cash market, which generally includes retail investors and proprietary books. FIIs bought close to $4 billion worth of Indian equities in September, accounting for a more than a fifth of their year to date purchases of about $18 billion.
"The market sentiment certainly observed a shift in September. While the growing participation of institutional investors is well reflected by the FII activity even the retail investors appear enthused with the revival in market reaction," said a dealer.
For September, cash market volumes averaged at Rs 14,825 crore, its highest in six-months after the government announced major policy measures commencing its much awaited reforms agenda in order to revive investor sentiments. While the market activity again cooled off in October, experts cite this as a consolidation phase as traders look for the next trigger as the earning season matures. Even the Reserve bank's policy meet scheduled on October 30, is widely awaited for the central bank is expected to reduce interest rates, following the government's recently commenced reforms plan, in order to revive economic activity.