Falling Trade Volume Dampens Sensex All Time High Cheers

The S&P BSE Sensex index’s rally to an all-time high is giving Magnum Equity Broking Ltd.’s Nilesh Karani little reason to cheer.

The 45-year-old broker has shut more than 60 percent of Magnum Equity’s branches after client orders shrank to 10 percent of their level four years ago. His listed rivals, including Motilal Oswal Financial Services Ltd. (MOFS) and India Infoline Ltd. (IIFL), have lost 30 percent of their value on average in Mumbai trading this year, lagging behind the Sensex by the widest margin since at least 2008.

“The business is not at all viable,” Karani said in a phone interview. “Our staff is looking out for jobs.”

While the Sensex closed at a record high on Nov. 3, trading commissions are shrinking as the combined turnover on India’s two-largest equity bourses falls to the lowest levels since 2006. Brokerage profits will stay under pressure as individual investors withdraw funds, according to Future Generali India Life Insurance Co. HSBC Holdings Plc (HSBA), Europe’s biggest bank, said last month it will close its retail stock-trading unit in India.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu