Shares of steel companies, riding on hopes of a sharp economic recovery, now top the trade volume sweepstakes on the bourses, ahead of bank and technology stocks.

The total traded volume of 10 steel companies' stocks on the Bombay Stock Exchange and the National Stock Exchange surged from 133.6 million in April 2003 to 1.08 billion shares in August (till August 14).

They now account for as much as 20 per cent of the trade volume on the NSE and the BSE, up from a mere 3 per cent in April.

Of course, this rise is accompanied by a fall in the trade volume share of bank and technology stocks. The controversy surrounding the return of capital by banks seems to have hosed down investor appetite for these stocks.

But bank scrips retain the second highest trade volume. The aggregate trade volume of bank scrips dropped from 1.94 billion in May to 1.68 billion in July. Till August 14, 550 million bank shares were traded.

Dealers at a local brokerage house said, "Interest in bank stocks continues to remain strong, especially on expectations of amendments to the Banking Regulation Act."

The information technology sector, which accounted for 41 per cent of the trade volume in April 2003, dipped to 20 per cent in May. This fell further to 14.6 per cent in June and 13.9 per cent in July.

Till August 14, the sector accounted for just 9.9 per cent of the total trade volume. The combined trade volume of the sector declined from 1.87 billion shares in April to 1.39 billion shares in July and just 536 million shares in August, till August 14.

The Steel Authority of India, the biggest state-owned steel company, has seen the trade volume of its share rising from 53.4 million in April to 628.8 million at the end of July. Further, 494.7 million shares were traded till August 14.

Buying interest in the counter has been on the rise ever since the company announced impressive June quarter earnings.

The stock was recently included in the NSE S&P CNX Nifty. Interestingly, The Steel Authority of India continues to remain the most traded stock.

The Jindal Vijaynagar Steel counter, which reported a volume of 1.1 million shares in the first week of August, jumped to more than 10 million shares in the last couple of days on the BSE.