Drawbacks of Indian Stock Market

1. Single Stock Futures

• Have made it easier for market players to manipulate not only prices of individual stocks but also the indices created using them.This is possible since one needs only small amount of margin money for buying futures.
• Use of these futures gives FIIs more leverage into reshuffling their country mix, which add to market volatility.

2. Unrestricted Day Trading

• No deliveries required
• In the US, regulations require that the seller of a share first becomes its owner by paying for it. Thus Indian markets are more risky.

3. Lack of market making

• Market making makes market broader and ensures liquidity of small and mid cap shares.