Notably, last month, India overtook Hong Kong as the fourth-largest equity market globally in terms of market value.
(File Photo)
In a significant development, India has surpassed the trading volumes of the Hong Kong Exchange (HKE) with the one-month average daily turnover (ADTV) for the domestic markets – NSE and BSE combined – being $16.5 billion, higher than $13.1 billion for the HKE.
Notably, last month, India overtook Hong Kong as the fourth-largest equity market globally in terms of market value.
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In January, India witnessed a record opening of new trading accounts as well as trading volumes. The broking industry added 4.7 million new accounts, surpassing the previous record of 4.1 million in the preceding month.
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Similarly, the ADTV for both the cash and derivatives segment (NSE and BSE combined) hit a record of Rs 1.23 trillion and Rs 460 trillion (on a notional basis).
“We think in some ways this reflects the prevailing consensus narrative toward India and HK/China stocks. Speaking to investors, we sense there is almost a consensus structurally positive view on India stocks (although valuations are widely cited as a stumbling block),” said Chetan Seth, Equity Strategist, Nomura in a note.
“However, in contrast, we sense that investors’ appetite for HK/China stocks remains quite low. In some ways, the recent exponential rise in trading values in India is also a concern, from a contrarian perspective,” he added.
Ajay Menon, CEO for broking and distribution of Motilal Oswal Financial Services said, “There is a considerable momentum in the market on the back of the rally that happened pre-budget and hopes of regime continuity. The volumes will continue to remain robust. More importantly, mid- and small-caps are rallying, which is reflected in the cash volumes.”
“Unless there is some big correction, there is no reason for cash columns to taper,” he added.
In the past year, the Nifty Midcap 100 and the Nifty Smallcap 100 have gained 60 and 74 per cent, respectively.
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