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.