Cash market turnover crosses Rs. 1 lakh crore in December
In a historic achievement, India's cash market segment for equities reached an average daily turnover (ADTV) of over Rs. 1 lakh crore in December. The combined ADTV for NSE and BSE hit a record high of Rs. 1.15 lakh crore, a 45.85% increase from the previous month. The ongoing steady domestic SIPs and anticipated large Foreign Institutional Investor (FII) investments are expected to further strengthen the markets, leading analysts to forecast an upward trend in ADTV.
Factors driving the increase in ADTV
Several factors contributed to the ADTV surge, including IPO listings across mainboard and SME segments, attracting investor funds, and numerous block deals involving promoters, large fund houses, or individual investors. Additionally, cooling inflation, expectations of US Federal Reserve officials cutting interest rates as soon as March, and rating agencies stating that India is among the world's fastest-growing sovereigns with resilient GDP growth attracted investors.
Record highs in future and option average daily turnover
The combined future and option average daily turnover for both exchanges also reached a new all-time high of Rs. 448.94 lakh crore in December, up 29.41% from a month ago. Deepak Jasani of HDFC Securities, said, "F&O market volumes rose even as the upside volatility in the Nifty led to higher activity in Index futures and options." He added that traders used F&O to capitalize on volatility while hedgers engaged in higher activity to protect their existing positions.
Analysts anticipate bullish momentum in 2024
As we enter 2024, analysts predict an increase in bullish momentum in global markets. India saw record domestic SIPs and declining bond yields in 2023, which may attract significant FII flows. Shrey Jain, Founder and CEO at SAS Online, stated that expectations of broad-based growth in corporate earnings and cuts in interest rates in CY24 should keep the stock markets buoyant.
