Stock delivery volumes on NSE, BSE drop to lowest since 2009

#1
Stock delivery volumes on NSE, BSE drop to lowest since 2009
Nov 02, 2018, 07.46 AM IST

High trading volume seems to be driving the stock market amid a significant fall in the delivery of stocks. The three-month rolling combined delivery of stocks on the BSE and the NSE has dropped to 34.5 per cent of the total transactions, the lowest since 2009, according to Bloomberg data. A year-ago, the delivery percentage was 40 per cent while the 10-year average delivery was 42 per cent. The delivery percentage has been consistently falling on the Indian bourses in the past two years amid rising stock valuations. On the other hand, the three-month combined cash turnover reached Rs 44,280 crore, 155 per cent higher than the 10-year average.

The participation of the foreign portfolio investors and mutual funds have been muted in the past two years. They accounted for 16 per cent and 8 per cent, respectively, of total turnover on the stock exchange. The holding of the retail in the BSE 200 stocks has been over 8 per cent since June 2015. This means the increase in the benchmark indices over the past two years has been supported by trading volume.

Historically, during a market fall, midcaps and the Bank Nifty underperform. However, this trend was reversed during the recent decline. Market observers believe that the dropping delivery percentage has been a prime reason for midcap stocks and the Bank Nifty index to outperform the benchmark Nifty 50 since August 28 — when the Nifty recorded a high of 11,700 — as investors held on to their positions when a bout of market fall began.

https://economictimes.indiatimes.co...to-lowest-since-2009/articleshow/66469868.cms
 

siddhant4u

Well-Unknown Member
#2
Stock delivery volumes on NSE, BSE drop to lowest since 2009
Nov 02, 2018, 07.46 AM IST

High trading volume seems to be driving the stock market amid a significant fall in the delivery of stocks. The three-month rolling combined delivery of stocks on the BSE and the NSE has dropped to 34.5 per cent of the total transactions, the lowest since 2009, according to Bloomberg data. A year-ago, the delivery percentage was 40 per cent while the 10-year average delivery was 42 per cent. The delivery percentage has been consistently falling on the Indian bourses in the past two years amid rising stock valuations. On the other hand, the three-month combined cash turnover reached Rs 44,280 crore, 155 per cent higher than the 10-year average.

The participation of the foreign portfolio investors and mutual funds have been muted in the past two years. They accounted for 16 per cent and 8 per cent, respectively, of total turnover on the stock exchange. The holding of the retail in the BSE 200 stocks has been over 8 per cent since June 2015. This means the increase in the benchmark indices over the past two years has been supported by trading volume.

Historically, during a market fall, midcaps and the Bank Nifty underperform. However, this trend was reversed during the recent decline. Market observers believe that the dropping delivery percentage has been a prime reason for midcap stocks and the Bank Nifty index to outperform the benchmark Nifty 50 since August 28 — when the Nifty recorded a high of 11,700 — as investors held on to their positions when a bout of market fall began.

https://economictimes.indiatimes.co...to-lowest-since-2009/articleshow/66469868.cms
This means the increase in the benchmark indices over the past two years has been supported by trading volume.

that explains traderji's involvement in taking Nifty all time high.. :p
 
#3
This means the increase in the benchmark indices over the past two years has been supported by trading volume.

that explains traderji's involvement in taking Nifty all time high.. :p
By this statement, do they mean to say that the increase in the Indices has happened mainly because of the INTRADAY TRADING, rather then based on Long Term DELIVERY BASED Trading ? But intraday traders have to sell their positions on the same day, so basically their NET buying selling is zero. So how can we assume that they caused the price to go up over last 2 years. Or am I missing something ?

Can someone please clarify ?

Thanks and regards
 

siddhant4u

Well-Unknown Member
#4
my understanding is 'delivery' is when you take stock even for 1 day. You buy 1 stock Sell 1 later, volume is 2. If more and more people are doing this, there is definitely demand for stock.
for eg.
Group of Persons (A) buys 100 shares from Group (B) and sells back end of day to B

Now there are 100 more people want to try hands on trading so group B can demand more price

I could be wrong or not able to explain it correctly. Here is another example I witnessed in 2007-2008 before crash -

In one of tier 2 city in Maharashtra, there was boom in farmer's land. People were buying 4 acre land and selling it within 4-5 weeks! Actually what they use to do is make agreement with Farmer that he will sell land to them in 6 months of time by paying him 1 Lac as 'bayana' later sold this paper agreement to others for 2 Lakh 'bayana' after 4 weeks. Basically trading future derivative on land. This pushed land price across region. As land is limited, buyers/sellers increased, it pushed price of land!
 

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