BSE Ltd. down to 4-month low after reports downgrade on CAS concerns
BSE Ltd. shares have declined for five consecutive sessions following analyst downgrades due to concerns over new regulatory norms and market headwinds. Brokerages cited the impact of the Securities Transaction Tax hike and new auction session rules on trading volumes.
Why it matters
The stock's performance reflects broader market anxiety regarding regulatory changes affecting domestic proprietary trading profitability.
Bombay Stock Exchange (BSE) Ltd. stock fell for five straight sessions, closing at ₹3308 a piece, down 0.7%, after brokerages downgraded the stock, flagging revenues due to the STT hike, RBI bank guarantee (BG) norms and the Closing Auction Session (CAS).
The stock closed 2.2% down to ₹3,527.00 a piece on August 12 and continued to dip every day for five straight days, down 6.2% till yesterday.
“Multiple headwinds for domestic prop traders to navigate: Domestic prop traders have been hit by three headwinds-STT hike, RBI bank guarantee (BG) norms and Closing Auction Session (CAS),” said Jefferies in a report. “Prop traders account for 50-60% of equity options notional turnover, with domestic prop traders likely accounting for half of the turnover,” the report read.
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