Delivery-based trades moderate in April after hitting eight-year high

Market volatility typically influences delivery-based trading volumes, according to experts

Delivery-based trades dipped in April after a sharp 12 per cent rebound in the benchmark Nifty 50 index, which hit an intraday low of 21,744 at the start of the month. As much as 43.53 per cent of the shares traded on the NSE and the BSE in the month were marked for delivery, down from 48.4 per cent in March, which was the highest level since March 2017, when delivery-based trades accounted for 52.6 per cent of the trade.

 

In FY25, delivery-based trades stood at 44.1 per cent of total trade volumes, with the rest being squared off on intraday.

Typically, a higher percentage of delivery-based trades indicates that traders are positive about the long-term prospects of the market. Intraday trades tend to be high when market conditions are volatile and traders are unsure of the direction that stocks could take. The percentage of delivery-based trades is also accentuated as intraday trades are not permitted in several counters, typically shares of smaller companies. 

The Sensex and Nifty in March gained 5.8 per cent and 6.3 per cent, respectively, their best monthly gains since June 2024, on the back of bargain hunting and reversal of foreign portfolio (FPI) flows. However, markets saw a sudden bout of selling at the start of April due to uncertainty triggered by American tariffs. India VIX, a gauge for market volatility, shot up 37 per cent in April after cooling off 9 per cent in March. Dhiraj Relli, managing director & chief executive officer (CEO) of HDFC Securities, said market volatility significantly influences delivery-based trading volumes. He also attributed “tax harvesting” for March’s higher tally. 

“Many investors employ tax-loss harvesting strategies near the end of the financial year to defer taxation. Tax-loss harvesting involves selling investments that have declined in value to offset capital gains elsewhere in your portfolio, thereby reducing your overall tax liability. Investors frequently repurchase previously sold securities at a later date or through alternative accounts, which contributes to a significant increase in delivery-based transactions during March,” Relli said.

  US President Donald Trump's sweeping “retaliatory tariffs” intensified a global trade war. They stoked recessionary fears, which led to a resurgence in market turbulence in April — China's announcement of retaliatory measures added to investors’ worry. 

  Stocks, however, staged a sharp rebound after Trump announced a 90-day pause and showed eagerness for negotiations with trading partners. In the latest rebound, the broader market Nifty Midcap 100 and the Nifty Smallcap 100 indices have outperformed the benchmark Nifty 50 index.

  “Markets posted huge gains in March after five months of sharp decline, which led to high delivery volumes. In April, the concerns about the economic impact of trade tariffs led to a spike in volatility, which led to a spike in intra-day volumes and delivery volumes have come off a bit,” said Prakarsh Gagdani, CEO of Torus Financial Market.

  Experts said delivery-based trades could rise if the broader markets continue to outperform. 

“There are a lot of beaten down stocks in the small-cap segment, and there is a chance of value buying. Moreover, many sectors post single-digit growth in large caps in their business. One can find better growth stories in the small caps. Moreover, intra-day trading opportunities are available only in large midcaps and large-caps. Even to make short-term profits, you must take delivery in small caps,” said Chokkalingam G, founder of Equinomics. 

 

Mood check	A higher percentage of delivery-based trades is an indication that trades are positive on the longer-term prospects of the market
	Delivery-based trades* (%)
Apr-24	43.8
May-24	44.5
Jun-24	43.5
Jul-24	43.9
Aug-24	45.6
Sep-24	44.9
Oct-24	44.3
Nov-24	42.5
Dec-24	44.1
Jan-25	41.7
Feb-25	41.5
Mar-25	48.4
Apr-25	43.4
Source: BSE/NSE; Compiled by BS Research Bureau
Note: April 2025 data as on April 29; *For both exchanges combined