Pivotals See Extended Volatility Sans Kerb
With kerb trading virtually absent from the markets, the broking community is now adopting new methods to adjust to the changing trading scenario.
The recent Sebi diktat, which stated that all negotiated deals and kerb deals should result in delivery of securities, has spelt the death knell for such trading. Kerb trading, which has been a common practice at other exchanges in the sub-continent, was seen as a shock absorber for market players who could realign their existing positions when any market-sensitive information suddenly hit the bourses.
The 125-year old market practice of kerb trading has virtually stopped over the past five trading days at the Bombay Stock Exchange (BSE), and this has brought in a new phenomena at the markets.
The volatility of key pivotals, which was witnessed in the last 10-15 minutes of trading at the major bourses, has now lengthened to nearly 45 minutes. Further, volatility at the markets in the opening session of the next trading day has also increased marginally.
At the National Stock Exchange (NSE) yesterday, the traded quantity of shares at the ITC counter moved up from 20.8 lakh shares at 2.45 p.m. to 25.19 lakh shares at 3.45 p.m. 70.2 lakh shares of ITC were traded during the day at the NSE.
Similarly, the Reliance scrip witnessed trading of 9,50,800 shares in the mid-afternoon session at the NSE which rose sharply to 24,37,450 shares towards the close.
The scrip witnessed a marginal slide from Rs 310 to close at Rs 309 at the NSE and Rs 306.5 at the BSE.
The overall traded volume at the BSE remained relatively low at Rs 605.68 crore despite hectic trading activity as brokers moved in to square up their positions on the last day of the trading cycle.
The total number of State Bank of India shares traded were 34.06 lakh at the Bombay Stock Exchange and 66.36 lakh at the National stock exchange.
Within the last hour, traded quantity of shares at the National Stock Exchange rose from 8,70,050 to 24,76,850.