BSE shares surge 10% to new-record high, rise 22% in last five sessions; here’s why

Shares of Bombay Stock Exchange (BSE) Ltd. jumped as much as 10.5 per cent on Monday to a new all-time high of ₹4,968.

BSE shares are experiencing a surge after its competitor, the National Stock Exchange (NSE), announced that starting November 20, 2024, weekly derivative contracts for Nifty Bank, Nifty Midcap, and Nifty Financial Services will be discontinued and converted into monthly contracts.

BSE shares have surged over 22 per cent over the last five trading sessions and nearly 40 per cent in the last ten trading sessions.

The shares have soared over 34 per cent in October to date, following a 30 per cent rise in September and an 11 per cent increase in August. The stock has posted gains in seven out of 10 months this year.

Overall, BSE shares are up 123 per cent in 2024 so far, after climbing 307 per cent in 2023 and 210 per cent in 2021.

Analysts view the move as beneficial for the BSE, as it is expected to attract trading volumes to its platform, resulting in higher transactions and increased revenue.

NSE last Thursday announced that effective November 20, 2024, weekly derivative contracts for Nifty Bank, Nifty Midcap, and Nifty Financial Services will be discontinued and replaced with monthly contracts.

In a note dated July 31, IIFL Securities pointed out that Nifty Bank accounts for 50 per cent of NSE's option premium volumes, making it the exchange's largest contract. The impact across three expiries is expected to affect 60 per cent of the total volume.

BSE's options tariffs are 7 per cent lower than those of NSE, potentially accelerating BSE's market share growth. Earlier this month, BSE announced that weekly index derivatives contracts on the Sensex 50 would be discontinued from November 14, and those on the Bankex from November 18, 2024.

Currently, BSE's market capitalization exceeds ₹67,000 crore. On the technical charts, the stock appears to be in "overbought" territory, with a Relative Strength Index (RSI) of 77. An RSI above 70 typically indicates that a stock is in the "overbought" zone.

Earlier this month, Asia Index, a fully-owned subsidiary of BSE Ltd., introduced three new indices: the BSE Sensex Sixty 65:35, the BSE Sensex Sixty, and the BSE Power and Energy Index.