BSE shares have extended their winning streak to three sessions, gaining another 2% to reach a day's high of ₹3,475 on the NSE, taking total gains to 10% over the period. The stock has recovered from significant declines, with the 10% gain coming after BSE shares had fallen over 7% in the past three sessions and tumbled 19% since the CAS came into effect on August 3. The 19% decline has eroded BSE's market capitalisation by ₹20,231.05 crore, with the stock down 30% from its 52-week high of ₹4,446.80 touched on May 27, 2026. Harish Jujarey from Prithvi Finmart noted that BSE has remained under pressure and has corrected nearly 30% from its all-time high, with the stock trading below all key moving averages. The next important support for the stock is now seen in the ₹3,100 - ₹3,000 zone, with the RSI near oversold levels of 30 showing slight positive divergence.
SEBI has announced a comprehensive review of the Closing Auction Session (CAS) methodology following market feedback after the new system's implementation. On Thursday, SEBI said it would review the methodology used to determine settlement prices for derivative contracts on expiry, following feedback from market participants after the rollout of the new CAS in the equity cash market. "Having considered the experience of the initial period of CAS implementation and the feedback received from various stakeholders, Sebi may be proposing certain changes in the methodology for determining settlement prices of derivative contracts, for which a consultation paper will be issued in about a week," SEBI stated. The consultation paper expected next week will be closely watched by brokers, proprietary desks, institutional investors and active derivatives traders, as any change in methodology could be important for expiry-day risk management.
Equity derivatives turnover on NSE and BSE fell to multi-month lows in August, with analysts attributing the decline to heightened volatility under the new CAS mechanism. Last month, NSE's total monthly equity derivative turnover stood at ₹34.48 lakh crore, the lowest since November 2023, while BSE's August turnover stood at ₹32.2 lakh crore, the lowest since June 2025. According to an ET report, the volatility prompted several market participants to scale back derivatives activity, particularly during the final half-hour of trading. BSE's average daily option contracts traded stood at 98 million in August, down 34.5% from 150 million in July, with the second quarter average at 124 million, down 20.2% from Q1FY27's 156 million. The systemic average daily option contracts traded across BSE and NSE stood at 223 million in August, down 22.9% from 289 million in July, for the second quarter at 256 million, down 20% from Q1FY27's 320 million.
BSE Ltd. is taking steps to engage traders in order to enhance day-end trading volumes after encountering liquidity challenges, as reported by The Economic Times. Sundararaman Ramamurthy, CEO and managing director at the oldest Indian bourse operator, acknowledged that HFT firms, proprietary traders and retail investors are not participating as they "seem to be not seeing benefit of this system." According to the CEO, "We are talking to them as their participation will only make CAS a success." "Some minor changes will always be considered to make the system more efficient," Ramamurthy stated in an interview with local television channel Zee Business. BSE has been holding meetings with dealers to understand why trading volumes have dropped since the new Closing Auction Session was introduced last month, with the exchange planning to share their suggestions with regulators. Ramamurthy said BSE isn't picking sides on which of these ideas are right, stating "We are collating it and then we will be engaging with the regulators as well because this is an important thing for the market."
Transaction charges are BSE's largest revenue stream, contributing nearly 78% in the June quarter (Q1FY27). Within transaction charges, options contribute as much as 95%, with the remaining coming from the cash segment, as BSE does not charge for transactions in the futures segment. The average daily option premium turnover peaked out in April at ₹33,145 crore, after which it started sliding due to various issues such as higher STT, changes in bank guarantee norms for proprietary traders and CAS implementation. Despite the challenges, BSE in the March to June quarter reported a 62% YoY jump in consolidated net profit to around ₹872-874 crore, up from ₹538 crore in the previous quarter last year. Revenue from operations rose sharply too, up about 63% YoY to roughly ₹1,566 crore from around ₹1,037 crore a year earlier. The strong financial performance comes despite the challenges faced by the CAS implementation, highlighting BSE's resilience in other business segments.
Investors seem to have priced in the short-term pain of lower transaction charges income, as BSE's shares have already lost about 23% of their value from the 27 May peak of ₹4,446. The average daily option premium turnover peaked out in April at ₹33,145 crore, after which it started sliding due to various issues such as higher STT, changes in bank guarantee norms for proprietary traders and CAS implementation. The pressure on the stock was further accentuated as investors anticipated the opportunity to buy an alternative exchange play after rival NSE filed its DRHP on 17 June. BSE's price-to-earnings multiple is now at 43, based on FY27 Bloomberg consensus estimates. Early indications from September numbers suggest that the bulk of the pain from CAS-related issues is behind it, with further downside for the stock likely to be limited unless new concerns emerge.
