India’s stock market in April showed a mixed trend, with cash market trading boosted by strong equity gains while derivatives volumes were impacted by higher taxes and regulatory constraints. Cash market turnover increased by 7% during the month, supported by a significant rise in equities following a sharp decline in March. Both the Sensex and Nifty recorded their strongest monthly recovery in over a year, with gains of 6.9% and 7.5% respectively, marking their best performance since December 2023.
The rally in equities also led to heightened trading activity in the cash segment, reaching an average daily turnover (ADTV) of nearly Rs 1.44 trillion, a level not seen in almost two years. In contrast, derivatives trading witnessed a decline due to the increase in the securities transaction tax (STT) from April 1. The STT on futures was raised to 0.05% from 0.02%, while the options tax increased to 0.15% from 0.1%, resulting in a 6% drop in derivatives turnover.
Despite the overall decrease in derivatives activity, the BSE managed to strengthen its position in the segment, with its notional market share surpassing 50% for the first time. BSE’s derivatives ADTV stood at Rs 269 trillion, higher than the National Stock Exchange of India (NSE). Additionally, BSE held around 31% market share in terms of premium turnover.
