The daily cash volume has doubled over the past year. It has grown month-on-month for the past three months. NSE accounts for nearly 90% of the cash turnover while the rest is by the BSE.
Higher cash market turnover due to rising stock prices is an often seen phenomenon. However, this time around, it has been well supported by the higher number of trades. At 4,558 lakh, the number of trades at the NSE in February were nearly double that of the five-year average. In addition, investors’ trade size or the ticket size expanded to Rs 35,707 compared with the five-year average of Rs 28,490 crore.
A higher participation of new investors has been another key driver for the rising cash volume. The rate of the opening of demat accounts has increased significantly in the current fiscal year. The number of new demat accounts was 10.7 million till January 2021 compared with an annual trend of 1.5-5 million over the past few years.
Further, the non-institution volume contribution increased to 66% in February from 40-50% seen in the past few years. The value of the total retail holding reached a record Rs 12.7 lakh crore at the end December 2020, a growth of 76% from March 2020, according to Primeinfobase.com. Retail holding accounts for 6.9% of the country’s total market cap and 13.7% of the free float.
