Investors stay bullish even after free fall: Market Report

The Indian stock markets may well be in a free-fall mode on most days in the recent past but if investor trading activity is anything to go by then they appear to be quite bullish over the longer term and are using the current dips as buying opportunities.

The delivery percentage in the current month is at multi-year highs, which clearly shows that investors are ready to buy and hold shares while expecting that prices will appreciate in the future.

The delivery percentage refers to the quantum of shares that investors buy and take delivery as well instead of doing intra-day trading. A higher delivery percentage is typically looked upon as a sign that investors are bullish over the longer term.

Data from the Bombay Stock Exchange or BSE shows that the delivery percentage in the current month is 68.4 per cent, which is the highest in nearly five years. A higher share of delivery trading was seen in March 2017 when it was pegged at 71.05 per cent.

Interestingly, the share of delivery trading has been registering a steady rise since September when the share of such trades was 51.24 per cent. Since then, each month has witnessed a higher share of delivery trading when compared to the previous month.

The delivery percentage in October and November was 54.27 per cent and 56.66 per cent respectively before rising further in December to breach the 60 per cent mark at 60.49 per cent.

The multi-year record-high delivery percentage in the current month assumes significance as the benchmark 30-share Sensex has witnessed huge volatility with a clear downward bias on the back of global and domestic concerns.

The index has touched an intra-day high of 61,475.15 in the current month but is currently hovering around 57,860-levels - a sharp fall of over 3,600 points from the month's high. On a monthly basis, however, the Sensex is currently down nearly 0.70 per cent from the previous month.

As mentioned earlier, a higher delivery percentage means the confidence level of investors is high as investors are buying and holding shares rather than buying and selling on the same day to make some quick intra-day gains.

On the National Stock Exchange or NSE, the delivery percentage in the current month is hovering around the 21 per cent mark - higher than the share of such trades in most of the recent months.