Mad March: Smallcap selloff sends trading turnover into a tailspin

Equity trading volumes, both in the cash and derivatives segments, dropped in March amid wild swings in stock prices.

The average daily trading volume for the cash segment (National Stock Exchange, or NSE, and BSE combined) fell by 16.3 per cent to Rs 1.07 trillion — the lowest since November 2023.

Market players said the drop could have been sharper if not for the large block deals in companies such as ITC, Tata Consultancy Services, and IndiGo seen during the month.

Meanwhile, the futures and options (F&O) turnover dipped by 5 per cent to Rs 460 trillion (notional turnover for options).

This was the biggest month-on-month (M-o-M) drop in F&O turnover since October 2022.

BSE’s F&O turnover rose M-o-M by 8.2 per cent to Rs 80 trillion, while NSE’s fell by 7 per cent to Rs 380 trillion in March.

Market experts said several traders incurred losses due to the wild swings seen in stock prices in the past few weeks.

In March, the Nifty Smallcap 100 saw a swing (difference between high and low during the month) of 15 per cent, while the Nifty Midcap 100 witnessed a swing of 9 per cent.

The benchmark Nifty 50, however, was relatively stable, with a swing of 3.8 per cent.