The Hindu Business Line : Buying absorbs heavy selling — Trading volumes robust in choppy times

MARKETS have an uncanny knack of surprising us. Just when one thought that the mayhem seen at the bourses in May might have done enough to spook investors and ensure that they steer clear of the markets, an analysis of the underlying trading statistics throws up an interesting picture.

The analysis of trading patterns for stocks that constitute the Nifty reveals that though markets went on a downward spiral in May, indicators such as traded volume, delivery volume and the total value of trade were higher than what was registered in April. The median rise in the case of both traded volumes and delivery volumes was 30 per cent; traded value at about Rs 75,000 crore was higher by about five per cent compared to the value registered in April.

Heightened levels of selling could probably explain the rise in the traded value, even as most of the stocks within the Nifty headed southwards. It would also be appropriate to mention here that foreign institutional investors who were largely responsible for the bull run of last year were net sellers in May to the extent of Rs 3,200 crore.

The analysis also shows that stocks that registered a sizeable rise in delivery volumes were the ones that saw sharp decline in value. The decline in market price of 25 stocks, in which the rise in delivery volumes was above the median, was 17.2 per cent; for the rest, the decline in price was lower at 11.4 per cent. Delivery volumes in 11 stocks witnessed a decline on a month-on-month basis.

Interestingly, in spite of the rise in the traded value for the Nifty stocks, for the NSE reckoned as a whole, the traded value in May at about Rs 99,000 crore was about four per cent lower than the corresponding figure in April.

The number of trades put through in May at about 3.6 crore was, however, higher than the 3.2 crore trades seen in April.

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