The Tuesday expiry has worked in favour of the National Stock Exchange (NSE) in September as its market share in the derivatives market increased to 61.9% after falling in the past four months.
The growth in the exchange’s average daily turnover sharply improved (14%) to `270 lakh crore in September. The growth was 3.3% and 5.4% in the previous two months.
Derivatives shift: NSE rises, BSE declines
Meanwhile, the BSE recorded a fall for the first time after three months. It declined 6.6% to Rs 166 lakh crore. The total turnover for both the exchanges from 22 trading sessions in September rose 22% month-on-month with the NSE at Rs 5,942 lakh crore and the BSE at Rs 3,651 lakh crore.
In May, the markets regulator issued a circular restricting expiries to just two days a week and asked each exchange to select one.
Analysts weigh in on expiry cycles and long-term liquidity
According to analysts, the expiry schedule before the shift used to benefit the BSE with three working days between expiry cycles, compared to two for the NSE. They estimated a 5–15% decline in trading volumes for the BSE, but said that the exchange’s ability to build liquidity in longer-term contracts can offset this impact.
In September, the share price of the BSE, the only listed exchange, fell around 5% on news that Sebi was planning to do away with weekly expiry.
Ashwini Shami, portfolio manager at OmniScience Capital, said: “While the valuation gap has narrowed down, the stock is not in our comfort zone.” He expects the expiry day volumes to adjust over time. With more participants, including FIIs, coming to the market, newer structures are needed. “Price discovery is not an issue anymore, as many smallcap stocks are heavily traded on the exchange,” he said.