Cash Market Turnover Rose 32% During India's 15% Correction

Mutual funds invested a net ₹41,304 crore in equities between January and March 2020 during the Covid sell-off. In the first three months of 2026, that figure was ₹1.53-lakh crore, nearly four times higher. For January-May, it rose to ₹2.87-lakh crore.

Non-institutional investors also returned, particularly in small- and mid-cap stocks. Activity in those segments had slowed during the correction but has since picked up, said Deepak Jasani, an independent market veteran.

The cash-market resilience contrasts with the derivatives segment. Average daily derivatives turnover across exchanges declined from ₹472-lakh crore in December 2025 to ₹462-lakh crore in May 2026. That is a recovery from the low of ₹296-lakh crore recorded in December 2024, shortly after SEBI tightened norms on index derivatives, including higher contract sizes.

"Traders have tweaked their systems and processes to better suit the new conditions they are operating in," Jasani said.

The recovery has not been uniform. Smaller traders have been hit hardest, said Feroze Azeez, Joint CEO of Anand Rathi Wealth. "The most impacted category has been retail or individual traders, particularly those trading small-sized contracts with limited capital. The higher minimum contract sizes have effectively raised the entry barrier," Azeez said.