look news india
There have been ups and downs in the stock market for the last few days. There has been no change or decline in investors' tendency to borrow against total stock amid stock market uncertainty.
Margin trading funding (MTF) facility is provided to investors in the stock market. This is a facility under which loans are given to investors to buy stocks that they cannot afford. This MTF increased by 50 percent last week as compared to March 31. The recent reduction in interest rates on lending to investors in the market has encouraged individual investors to make greater use of this funding.
At present the total MTF book figure has reached Rs 84,800 crore. As of March 31 this year, this figure was Rs 57,101 crore. Whereas on June 30 this figure was Rs 73,577 crore. The average MTF interest rates across brokers have dropped to below 15 percent from 18 percent last month.
The MTF book has grown rapidly over the last few months due to steady increase in retail participation, market momentum and low interest rates. These factors have encouraged investors and created an environment for favorable margin trading. Experts said investors are looking to cash in on the market rally through higher leverage and more margin trading activity.
