The weekly expiry turnover of the National Stock Exchange (NSE) turned around sharply on Thursday – up 21% to Rs 510.13 lakh crore from Rs 421.29 lakh crore last week. The number of contracts traded also rose 22% from the previous expiry day to 276.33 million.
SEBI
Market participants said that the turnaround in fortunes could be attributed to the Securities and Exchange Board of India’s (Sebi) decision to allow US-based market maker, the Jane Street (JS) Group, to resume trading in the Indian stock market. Last week, JS deposited Rs 4,843.5 crore of penal charges.
The regulator in a press release said on July 21 that the group has agreed to cease and desist from manipulative and fraudulent activities and exchanges have been asked to closely monitor its activities until Sebi’s investigation is completed.
According to Rajesh Palviya, head of technical and derivatives at Axis Securities, the resumption in JS Group’s trading activity primarily led to the recovery both in the number of contractsand turnover. He also added that another factor can be as market participants assessed the first quarter results of IT companies.
While the market regulator has said there should not be a major impact from this action, it has also increased its surveillance measures. Palviya noted that the JS group will have to revisit their strategies as they have only been allowed to trade with certain conditions. The regulatory monitoring along with the framework put in place for algo traders which are the counter parties for trades will help bring down expiry day volumes gradually.
NSE
The notional expiry day turnover in index options contracts on NSE rose on Thursday from the previous expiry of July 3 to Rs 503 lakh crore. The average expiry day turnover in June was Rs 564 lakh crore. Between the previous expiry and July 24, the premium turnover has also risen 23% to Rs 48,543 crore.