New companies in derivatives list rise

The share prices of 10 out of the 11 stocks which will be included by the National Stock Exchange (NSE) for futures and options (F&O) trading from February 19 rose 2-10 per cent on Wednesday.

The stocks that will be included in the F&O segment are Adani Enterprises, Apollo Tyers, Areva T&D India, BGR Energy Systems, Fortis Health Care, Godrej Industries, Mcleod Russle, Mundra Port & SEZ, On Mobile, Jain Irrigation and Videocon Industries. Jain Irrigation was the only stock to fall on Wednesday.

Market players said these stocks would see higher speculation after they were included in the derivatives segment. There is no circuit filter in the F&O segment and speculation is high. The market lot and the list of contracts would be announced tomorrow, said NSE.

This is the first time in nearly two years that NSE has included stocks in the derivatives segment. The aim was to improve volumes, said market players. After the market crash of 2008, the exchange had to remove shares of several companies from the segment as they had turned illiquid. At the peak of the stock market boom, there were nearly 225 scrips in the derivatives segment of NSE.

The inclusion of new stocks would take the number of stocks traded on NSE’s F&O segment from 179 to 190. This would significantly increase derivatives volumes and improve market depth, brokers said. The average daily turnover in NSE’s derivatives segment has picked up over the past one month. Trades worth Rs 70,000 to Rs 1 lakh crore are executed on the exchange’s derivatives segment every day. Around 40-50 per cent volumes in the segment are generated by stock and index futures.