Why are NSE trading volumes at a two-year low in December?

Trading volumes are at a two-year low due to subdued investor interest, particularly stemming from the underperformance of small-cap and mid-cap stocks.

How has the performance of mid and small-cap stocks affected trading?

The significant underperformance of mid and small-cap stocks has reduced market breadth and investor confidence, leading to lower trading volumes.

Are retail investors trading less on the NSE?

Yes, retail trading volumes have decreased by nearly 20% year-over-year, as investors have not seen substantial portfolio gains.

Home / Business and Economy / Investor Chill: Trading Volumes Hit Two-Year Low

Investor Chill: Trading Volumes Hit Two-Year Low

17 Dec

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Summary

Equity market turnover fell to nearly a two-year low in December.
Mid and small-cap stocks significantly underperformed this year.
Retail trading volumes down nearly 20% year-over-year due to weak market breadth.

Investor Chill: Trading Volumes Hit Two-Year Low

Investor engagement in the stock market has significantly waned, reaching subdued levels not seen in almost two years. The average daily turnover for equity trades on the NSE in December has dipped to ₹90,076 crore, marking the lowest point since November 2023.

This reduction in trading activity contrasts with the Sensex and Nifty recently touching all-time highs. Analysts attribute the lower volumes to the underperformance of small- and mid-cap stocks, which has led to reduced trading churn and investor hesitancy, even as domestic institutions absorb foreign portfolio investor selling.

The impact is felt across investor segments, with retail traders, high-net-worth individuals, and even institutional participants scaling back. Brokers are anticipating softer third-quarter earnings due to this significant drop in trading volumes, with future market activity contingent on foreign investor reallocations.