Trading activity falls in small-cap stocks

But, trading activity in stocks that form part of BSE’s ‘A’ group —comprising the top 300 stocks— has risen since the demonetisation move


Turnover of the myriad other stocks traded on the BSE such as the small-cap stocks has fallen by around 42%. Photo: Madhu Kapparath/Mint
Turnover of the myriad other stocks traded on the BSE such as the small-cap stocks has fallen by around 42%. Photo: Madhu Kapparath/Mint

Overall stock market trading has risen since the government’s demonetisation move. But trading in mid-cap and small-cap stocks has fallen considerably.

Trading activity in stocks that form part of BSE’s ‘A’ group (comprising the top 300 stocks) has risen since the demonetisation move. Based on a seven-day moving average, trading in ‘B’ group stocks—primarily mid-cap stocks—fell by about 35% since the government announced the move on 8 November.

Turnover of the myriad other stocks traded on the BSE—small-cap stocks—has fallen by around 42%.

Just ahead of the government’s announcement, stocks outside of the ‘A’ group accounted for over 40% of total turnover in BSE’s cash equities segment.

This has now fallen to 23%.

A similar trend was visible earlier this year, when the markets corrected after by around 15% between early January and mid-February.

During that time, the share of non-A group stocks fell from well over 50% of total trading activity to around 25% by mid-February.

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