ET Intelligence Group: With spare time due to lockdown, uncertainty of income and sharp fall in the stock prices, trading volume on Indian bourses have increased, reflecting rising activity by investors. The combined total volume on the two stock exchanges, BSE and NSE, shot up by 49 per cent, 34 per cent and 40 per cent in the past 30, 60 and 90 days, respectively.
A similar trend has been observed in the turnover, which increased by 44 per cent year on year in the past 90 days to Rs 38 lakh crore. In the three months to March 2020, turnover had increased by 26 per cent to ₹34,00,000 crore.
The benchmark indices, Nifty 50 and Sensex, have gained 19 per cent since March 24, when the nationwide lockdown began, despite net selling by foreign and domestic institutions (FIIs and DIIs), excluding block deals. This suggests retail investors and traders have become more active in the market. About 1.2 million new investors have opened demat accounts with Central Depository Services (CDSL) in March and April. National Securities Depository (NSDL) did not disclose data.
This is a positive scenario for stock exchanges, leading brokerages and securities depository companies. Among the listed companies that may benefit from this trend include ICICI Securities, IIFL Securities, Motilal Oswal Financial Services, CDSL and BSE. Brokerages including Edelweiss Financial Services and JM Financial have a significant exposure to the non-banking finance sector which would, however, more than offset the gains from the brokerage business.