Daily cash trading volume has dropped to $10 billion from a record $19 billion in early February, data compiled by Bloomberg show, the bulk of the decline in recent sessions.
Warnings from India’s securities regulator that small caps are becoming overheated have sent local shares tumbling, with valuations of such companies falling more than 6% this month. Individual investors, who typically hold large amounts of cash, are likely to hold off on new purchases until the market stabilizes, leading to slow trading activity.
“Retail investors are stuck on the wrong track” and remain on the sidelines until clear trends emerge, said Ashish Kyal, founder of Waves Strategy Advisors Pvt Ltd.
Despite the broader market downturn, the appetite for larger deals remains strong among institutions. Block trades have topped $7 billion this year, their best quarter in 14 years, data shows.
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