Southern European markets have seen a significant uptick in trading volumes during October, according to figures from Thomson Reuters’ Equity Market Share Reporter.
Both Italy and Spain saw a major increase in total value traded at a time when markets across Europe have seen a strong recovery as investors shift out of fixed income in favour of equities.
Italy’s stock exchange saw the strongest gains in October, with lit trading volume rising to €60.41 billion, up 40% compared with the €43.14 billion seen in September and a 49.8% increase on October 2012.
The huge growth comes despite concern that Italy’s equity markets would suffer as a result of a financial transaction tax (FTT) on equities introduced in March and extended to derivatives in September.
Lit trading in Spain also fared well, with the Mercado Continuo increasing 36% from €22.78 billion in September to €30.96 billion last month, according to Thomson Reuters.
Both countries have seen trading activity significantly outperform Europe as a whole. In total, €787.5 billion was traded on European exchanges in October 2013, up 9.9% from €716.5 billion in September and a 21% increase compared with October 2012. The positive trend in volumes indicates improving liquidity in Europe as more investors move out of fixed income and into equities as the prospect of reduced quantitative easing looms.
Dark trading on multilateral trading facilities has grown more quickly than lit, increasing by 15.2% month-on-month to €47.8 billion and up a huge 70% on an annual basis.
As a result of increased trading volumes, both Italy and Mercado Continuo saw a significant increase in their market share, with Italy rising from 7.66% in September to 9.59% last month. Mercado Continuo’s market share increased from 4.04% to 4.92% over the same period.
Among the large exchange groups there was little change in October with BATS Chi-X Europe leading followed by LSE and Deutsche Börse. While all three saw volumes grow in October they each experienced loss of market share due to strong growth on other venues.