Equity markets in India experienced a challenging month, with substantial downturns and significant Foreign Portfolio Investors (FPIs) outflows leading to contracted trading volumes across both equity cash and derivatives segments. The Nifty index, in particular, had its worst monthly showing in 10 months.
The average daily trading volume (ADTV) plummeted nearly 20% month-on-month to Rs 72,178 crore ($9.7 billion) for the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) combined. The combined ADTV for the derivatives segment also experienced a dip of about 2%, settling at Rs 351.7 trillion ($4.73 trillion). The Nifty index fell around 5% before managing a recovery, ending the month with a loss of 2.8%.
Coinciding with these events was the breach of 5% by 10-year US Treasury yields, which marked its highest level since January. This led to FPIs pulling out nearly $3 billion domestically in the cash segment - their most significant withdrawal for the year.
This heightened market volatility and uncertain outlook have deterred large trading bets, further impacting trading volumes.
Despite the overall decline in the derivatives market, there was a contrasting performance between the two exchanges. The NSE derivatives turnover saw its first month-on-month decline in a year, while BSE experienced growth in its derivatives market share, reaching 9.3% in October. This indicates that while market conditions were challenging overall, different players experienced varied impacts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.