Mumbai, Dec 17 The sharp and swift fall in the stock prices of Monday indicates the fact that investors were caught laid back and had not anticipated such a large fall in a single session. The trading volume on the Bombay Stock Exchange (BSE) surpassed its rival's National Stock Exchange (NSE) for the first time in recent times. The BSE recorded total number of shares traded in the cash market at 99.02 crore shares as against 98.98 crore shares traded on the NSE.
BSE witnessed an average trading volume in the range of 67 crore share to 79 crore shares till last Friday. The trading volumes spurt up suddenly on Monday and out paced NSE's volume which has averaged daily trading volume in the range of 83 crore shares to 88 crore shares in the last one week.
According to market analysts, the sharp rise in the BSE's traded volume indicates the fact that more trading took place in the small- and mid-cap stocks compared to average daily trading volume. The higher volume on BSE is also on account of more number of stocks listed on the exchange compared to NSE. BSE has a population of over 7,700 listed Companies of which almost 2,900 stocks are traded on a daily basis, while NSE, on other hand, has a population of listed and permitted Companies in the range of 1,100 and most of them are liquid and traded on the exchange on daily basis.
A leading market analyst said, the sudden rise in trading volume on both the exchanges on Monday was on account of triggering of stop losses, which investrors and brokerages adhere to when Markets are volatile. The fall at the fag end of the session was so swift that prices fell to the level of the stop loss level and investors did not get a chance of squaring up their position. This must have resulted in moderate to heavy losses to the investors, who could not reverse their position in time, he added.
This fact can be proved from the point that though the trading volume has jumped sharply, the turnover has not kept pace, indicating sharp fall in stock prices, thereby resulting in the loss. BSE on Monday recorded a turnover of Rs 9,641 crore while NSE clocked a turnover of Rs 20,428 crore, which is in line with the average turnover witnessed in the previous week.
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