Cash market turnover falls 16% MoM, hits 5-month low in July

The Indian equity market witnessed a sharp slowdown in July as the average daily turnover (ADT) in the cash segment fell 16% month-on-month (MoM) to below ₹95,000 crore, marking a five-month low after four consecutive months of growth, according to NSE’s monthly report Market Pulse. On a year-on-year (YoY) basis, overall cash market turnover was down 32% compared to July 2024, it showed.

As per the report, this decline in cash market came despite an increase in overall investor participation, suggesting a shift in trading dynamics. Large investors appeared to turn cautious, with the average trade size slipping 9% MoM to ₹29,900.

Segment-wise, trading in infrastructure investment trust (InvITs) saw the steepest fall at 38%, followed by Sovereign Gold Bonds at 30%, mainboard equities at 16%, and Exchange Traded Funds (ETFs) at 14%. However, companies listed on the NSE Emerge platform bucked the trend, reporting a marginal rise in turnover, the NSE data showed.

A similar trend was seen in the equity derivatives segment as well. Equity futures turnover dropped 13% MoM, while options fell 11%. Within futures, index futures recorded a steep 24% MoM fall in ADT to below ₹24,000 crore, and stock futures slipped 10% to ₹1.2 lakh crore, both hitting their lowest levels in 20 months. In the options market, index options premium turnover declined 11% MoM to ₹37,431 crore, the lowest in 32 months, while stock options fell 14% to ₹6,148 crore, their lowest in 20 months. On a YoY basis, index options premium turnover plunged 37%, the report highlighted.

As per the report, a closer look at daily patterns showed that options turnover spiked mid-week, with activity on Wednesdays (a day before expiry) rising 21% and on Thursdays (expiry day) climbing 15%. However, turnover dropped sharply on other days—27% on Mondays, 16% on Fridays, and 11% on Tuesdays. Despite the mid-week surge, the average trade size in index options fell to ₹9,034 crore, a seven-month low. In contrast, trade sizes in index futures and stock futures hit record levels at ₹27.4 lakh and ₹8.5 lakh, respectively, the report noted.

Within index options, the Nifty50 contracts saw premium turnover decline 11% MoM to ₹32,038 crore, though YoY it was up 77%, underscoring the structural shift in trading volumes driven by the exclusive availability of weekly options. Bank Nifty, however, faced the sharpest setback. Hit by regulatory curbs, its premium turnover plunged 85% YoY to just ₹4,539 crore, while also slipping 12% on a monthly basis, reflecting waning trader interest, the data showed.

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