Street Signs: Derivatives on ice, markets stuck as clarity evaporates, more

Equity markets entered correction territory last week, with the NSE Nifty and broader market indices, Nifty Midcap 100 and Nifty Smallcap 100, declining more than 10 per cent from their all-time highs

Derivatives on ice: Regulatory chill brings temporary slowdown

 

Derivatives volumes are expected to decline this week due to two major changes taking effect. Starting Wednesday, the lot size for all index derivatives contracts will increase from Rs 5 lakh to Rs 15 lakh. Additionally, the weekly expiry will be limited to one benchmark per exchange. Market participants anticipate a one-third reduction in derivatives volumes due to these changes. “The intention is to reduce turnover on the derivatives exchange and discourage uninformed retail investors from entering the market. I expect an immediate 20-30 per cent drop in overall volumes, but this will be temporary. Some turnover will migrate to stock options, as the lot sizes are the same, and others will move to the index. Traders will adapt their strategies to the National Stock Exchange Nifty and the S&P BSE Sensex movements,” said the chief executive officer of a brokerage, who asked to remain anonymous.

 

Flatlining in the mist: Markets stuck as clarity evaporates

 

Equity markets entered correction territory last week, with the National Stock Exchange Nifty and broader market indices — Nifty Midcap 100 and Nifty Smallcap 100 — declining more than 10 per cent from their all-time highs. Rising inflation in India compounded the woes of investors already facing pressure from disappointing earnings and sustained foreign outflows. This week is expected to remain subdued, with no big triggers to sway the markets. “There isn’t much to look forward to this week, as the results season and US data are almost done. The dollar’s movement and US market trends will determine the market’s trajectory. We may need a few more sessions to form a temporary bottom. The Nifty’s key support and resistance levels are 23,345 and 23,960, respectively,” said Deepak Jasani, head of retail research at HDFC Securities.

 

The spark that didn’t ignite: NTPC Green and BlackBuck falter in grey market

 

The grey market premium (GMP) for the NTPC Green Energy initial public offering (IPO) — the umbrella company for NTPC’s green energy initiatives, which aims to meet the ambitious target of 60 gigawatt by 2031-32 — is a modest Rs 1.4 above its issue price. The company plans to raise Rs 10,000 crore, with its IPO priced between Rs 102 and Rs 108 per share. A selloff in the secondary markets and the fact that most of the proceeds are earmarked for debt repayment has led to a lack of investor interest. Elevated pricing has also been cited as a factor. Food and grocery delivery firm Swiggy, which also had a lacklustre GMP, rose 17 per cent on its listing day last week, although it corrected by 5.7 per cent on Thursday. The IPO of BlackBuck Zinka Logistics Solutions, India’s largest digital trucking platform, which concludes on Monday, currently has a GMP of zero. So far, the IPO has been subscribed 0.32 times.