Cash Market Turnover Hits 8-Month High in May Amid Market Rally:

Suspense crime, Digital Desk : In May 2025, the average daily turnover in cash segments for both NSE and BSE reached Rs 1.16 lakh crore. This surpasses the figure recorded in September 2024 and represents an 8% increase relative to April. This marks a sustained increase for the past three months indicating increased activity in the market as well as participation from investors.

Turnover has increased more than 20% since the 15-month low reached in February. Analysts attribute this to an uptick in bulk and block deals including some notable ones from TD Power, Swiggy, Nykaa, Indus Tower, KPR Mill, Eternal, and Vishal Mega Mart.

Sentiment improves with geopolitical

SKI Capital Services MD & CEO Narinder Wadhwa emphasized that investor confidence has been bolstered by improving geopolitical conditions such as tariff cuts and a ceasefire with Pakistan. This has led to a greater willingness to take on exposure in the markets.

Widespread gains in stock indices

Midcap and Smallcap indices are outperforming, where BSE Midcap surged over 5.2% and BSE Smallcap more than 9%. So far this May, both Sensex and Nifty have seen increases of more than 2.5%. Compared to mid-April, benchmark indices saw an increase of 12%, with Midcap and Smallcap indices outperforming those figures with 15% and 17% increases, respectively.

Strong Earnings and FII Inflows Support Uptrend

Despite adverse market conditions, Indian fundamentals remain robust, particularly in light of better-than-expected earnings for Q4FY25. Foreign Institutional Investors (FIIs) turned net buyers in May and pumped over Rs 13,000 crore into the markets after previously selling off assets.

Wider Participation and RBI Ploicy Enhance Confidence

Wider participation in mid and smallcap stocks has further strengthened the momentum. The liquidity conditions have also improved on the back of two rate cuts from the Reserve Bank of India in 2025, which help market sentiment.

Increasing turnover suggests to Mayank Mundhra, an economist at Abans Financial Services, that the observed shift Joshi is related to macroeconomic factors supportive after months of bearishness paired with growing appetite for risk.

F&O Turnover Declines Despite Cash Segment Surge

While the cash segment witnessed an increase, the Futures and Options (F&O) segment saw a 6% fall in average monthly daily turnover in May, bringing it down to 215.72 lakh crore. Stock futures suffered the most with a steep 22% decline, while index-based products also lost more than 6%. Nonetheless, stock options did increase by 5.7% month-on-month.