The share price of BSE fell nearly 2% in intraday trade today, hitting a low of Rs 2,446.60 before recovering slightly to Rs 2,488.90, down 1.6% at the time of writing. The decline in the share price of the company comes on the heels of regulatory remarks that raised red flags about the structure of India’s fast-growing derivatives market.
SEBI’s warning on F&O volumes sparks investor caution
SEBI whole-time member Ananth Narayan, speaking at a capital markets event in Kolkata, pointed to the imbalance between volumes in index options and the underlying cash market.
He noted that on expiry days, option turnover can be hundreds of times higher than spot market activity, a trend he termed “unhealthy” and potentially risky. Narayan also hinted that SEBI may look to revamp product tenures and introduce more long-dated contracts to address market distortions.
“We must look for further ways to further deepen our cash equities markets, even as we look to improve the quality of our derivatives market by extending the tenure and maturity of the products and solutions on offer,” said Ananth Narayan, a whole-time member at the Securities and Exchange Board of India (SEBI).
Jane Street case still weighs on sentiment
Investor mood around capital market-linked stocks like BSE remains sensitive following SEBI’s July 3 action against Jane Street, a US-based proprietary trading firm. The regulator alleged the firm manipulated index levels and made wrongful gains of over Rs 4,800 crore, a sum now parked in escrow. Although Jane Street has since appealed for relief, SEBI’s ongoing probe now reportedly includes BSE as well, given rising volumes in Sensex-based contracts.
Stock performance
Despite recent volatility, BSE shares have delivered strong gains over the past year, up 224% annually, 26% in the last three months, and nearly 37% year-to-date.
The stock is currently trading off its 52-week high of Rs 3,030, but far above its yearly low of Rs 705. The company commands a market cap of Rs 1.01 lakh crore.