Stock trading revenue continues to fall due to lower retail buying

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Average daily turnover via internet trading contracted for the second consecutive month in June, indicating a decline in retailer participation amid market volatility and an outflow of foreign funds.

Average daily cash market internet turnover fell 22.1% month-on-month and 53.3% year-on-year to Rs 8,044.1 crore in June, according to data provided by the National Stock Exchange.

In the equity derivatives segment, it fell to Rs 28,400 crore in June from Rs 3,1700 crore in May.

In the first quarter ended June, internet trading fell 41.1% to Rs 10,411.3 crore.

Although retailer participation is higher through mobile, data for the category is not available. However, the fall in turnover on the Internet is indicative of the interest of retailers.

Internet commerce has accelerated since March 2020 due to increased retail shopping as the pandemic-induced lockdown forces people to work from home. This was reflected in the record addition of demat accounts in FY21.

Average daily turnover through internet trading grew 70% year-on-year in the spot market to Rs 15,400 crore in FY21. But growth stalled since and revenue has been flat in FY22 as equity markets have been volatile due to valuations, rising energy costs and global supply chain disruption, amplified by Russia’s invasion of Ukraine.

Retail equity buyers invested a net Rs 11,600 crore directly into the market in June, slightly higher than in May.

In the NSE cash segment, the contribution of internet and mobile trading has declined steadily since the 2020 peak.

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