If you take the Nifty turnover (weighted sum of the turnover of all Nifty stocks) and compare it with the turnover of other indexes, what can you see?
The Nifty:Smallcap turnover ratio has come to yearly lows, and at the same time, the smallcap index itself has underperformed the Nifty massively in the year, down 10% versus Nifty’s +6%
But the green area at the bottom is the actual outperfomance (the difference between the Nifty’s and Small cap performance relative to the start of the year). That tells use that while the Nifty outperformed till September, things have changed quite a bit since then, with volumes shifting towards the small caps on a relative basis.
Since institutions don’t usually trade the small caps, you can assume that the trading volumes dictate shifts in retail investors and broker sentiment. Purely looking at volumes (instead […]