The average daily trading volume (ADTV) in the cash segment of equity markets has surged 61 per cent in August to Rs 81,446 crore against Rs 51,844 crore in January on back of relentless rally in equity markets and record addition of new investors.
The ADTV month-on-month was up 8 per cent in August from Rs 77,337 crore logged in July, buoyed by rush of initial public offerings.
The ADTV in the futures and options segment also jumped 56 per cent last month to Rs 314 lakh crore against Rs 204 lakh crore logged in January. Equity derivatives ADTV increased two per cent last month from Rs 307 lakh crore in July.
The sharp jump in turnover was on back of new investors entering the market chasing huge listing gains of the recent initial public offerings and renewed interest in secondary market.
New demat account opened with both CDSL and NSDL has hit a 19-month high of 12.66 crore with a record addition of 31 lakh in August. Compared to July, the number of demat accounts was up three per cent.
In the last eight months, the number of demat accounts have surged 15 per cent from 11 crore in January.
Satish Menon, Executive Director at Geojit Financial Services said trading volumes generally rise when the market rallies on a sustained basis and Nifty had gained nearly 3000 points getting closer to 20,000 points in July from the lows of about 17,000 in March.
Unlike in previous occasions, the market rally this time around was broad based and has attracted many investors into the market pushing the trading volumes to record levels, he added.
BSE Sensex has zoomed 6,132 points to 64,831 points in August from a low of 58,699 in January despite foreign portfolio investors (FPI) booking profit.
FPIs have sold equity investments worth Rs 8,832 crore so far in September, as per NSDL data. The reversal in FPI investments from buying in the last three months to booking profit in September was mainly due to the rising US bond yields and the uptrend in the dollar index.
Even while booking profit in the secondary markets, FPIs have been an active participant in primary markets and pumped in over Rs 21,000 crore in IPOs between April and August.
Mahavir Lunawat, Managing Director, Pantomath Capital Advisors said after a decline in IPO activities last year, issuances are expected to jump 30 per cent in this year with a strong pipeline of Sebi approved IPOs worth Rs 74,700 crore waiting to tap the market.
The future of primary market also looks bright with SEBI considering corporates applications to raise another Rs 49,000 crore through IPO, he added.