“The markets are finally correcting. Given that markets swing between extremes, they can fall more just like they rose to the peak,” Kamath said on social media platform X.
India’s equity markets have been on a downward trend for the past five months, forcing Nifty to record its worst ever monthly losing streak since it came about. The damage has been one-sided with not so many pullbacks. For instance, Sensex fell nearly 4000 points this month.
Market correction typically reduces investor confidence and contributes to declining trading volumes. This can lead to lower revenue from commissions and fees for the brokers.
During bear phases, retail and institutional investors also adopt a wait-and-watch approach, resulting in fewer transactions and reduced liquidity.
Kamath acknowledged the industry is seeing a “massive” drop in both number of trades and volumes.”I’ve no idea where the markets go from here, but I can tell you about the broking industry. We are seeing a massive drop in terms of both the number of traders and volumes,” the CEO of Zerodha noted.Across brokers, there’s a more than 30% drop in activity, Kamath said. “This drying up of volumes shows how shallow the Indian markets still are. The activity is more or less among those 1-2 crore Indians.”
Not just the brokers, the falling markets will also be a concern for another entity, the government, which gets a significant part of revenue in the form of taxes.
The government will not make even Rs 40,000 crore from securities transaction tax (STT) in FY26, at least 50% below the Rs 80,000 crore estimate, said Kamath.
The current market downturn has been largely fuelled by geopolitical uncertainties, with Donald Trump leading the bad news for investors. The large exodus of foreign investors
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