Majority of Indians invest for long term, says NSE CEO

Fragile sentiment, regulatory changes behind 45% drop in cash volume, 16% slump in margin trading

- KHUSHBOO TIWARI

Weak market sentiment has driven a steady decline in cash market volumes and margin trading books over the past nine months. Cash market volumes have plummeted by 45 per cent from their peak in June 2024, while the margin book—used by traders to leverage stock purchases—has shrunk by 16 per cent since its high in September 2024.

Analysts attribute the downturn to a mix of fragile sentiment and regulatory changes, which have also curbed options premium volumes.

Experts warn that a shrinking margin book and reduced leverage could raise concerns over market liquidity and investor participation.

Even as stock prices have recovered this month, average daily cash market turnover is down by 3 per cent month-on-month, marking a third straight month of decline.

"In the first two weeks of March, cash volumes continued to slide for NSE, dropping 5.7 per cent to an average daily trading volume, while BSE volumes held steady," said a report by ICICI Securities.