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Charts & Analysis

NSE Volumes at a 5 year Low

With a turnover of just 5138 cr., December 26, 2011 has taken volumes to a (near) five year low.


(You have to ignore Diwali Mahurat trading days, the big upper circuit day in May 2009 and a few saturdays of test trading by the NSE)

The chart says it all. Markets are dying.

  • Some more facts
    Cash trading volumesAt a seven-year low
    Derivatives trading volumes At record Levels
    Options trading volumes Share in derivatives trading risen to 76% from 68% (in 2010) and 52% (in 2009)
    Trading Activity in ‘11: Options Trading Account for 3/4ths of Total Derivatives Trading
    Volatility in ‘11: Hedging Activity at Record levels
    This is as per some foreign broking reports ( assuming it to be reliable )
    Never seen such apathy towards equities in the past many years.

  • rrp says:

    Markets are dying ? Doesnt it simply mean that this is because most traders are on holidays . Even from the chart there are no clear patterns seen over these 5 years.

    • The trend is now clearly downwards, and volumes have been abysmal the last few months. India’s GDP has doubled in the meantime – you would expect people to put more money into the markets, but no, they clearly don’t want to. The markets are indeed dyign away…

  • So what are your views on our dying markets?
    Is it a good idea to start taking long calls or is it advisable to wait and watch for the time being?

  • Sanjay says:

    I really wonder what GDP has to do with share market? What matters is profit, right? If top line has doubled and bottom line remained the same, then why I should pay more for the share?

    • Technically that means lowered margins which means you’ll pay less. But it also means that growth doesn’t mean profit, at a macro level (which is true, check the Nifty EPS after five years, growth is really little). That means we are paying a similar p/e to what we were paying five years ago, despite little growth…and volumes suck as well.

  • Kshitij says:

    With due respect……………. the tide will turn.
    Just have patience. We have been around long enough to know there are cycles. I keep seeing people buy the media hype and cr_p.
    Go to the gym, spend time with your kids, focus on your health.
    This will turn …….. be alert then and forget all the surrounding gloom/doom news. Just totally shutout the negativity. (This suggestion is for those sitting in 95%+ in cash. For those sitting in 95%+ equity, God bless! ).

  • Bhupesh says:

    As a layman reading of this chart .. Market looks at bottom of trading volume range .. so possible directions
    1) define new low
    2) remain at same volume level for a while ..
    3) takeoff from now ..
    Which has higher probability 1), 2) or 3) .. each one’ own guess 🙂