National Stock Exchange of India Derivatives Turnover Hits 17-Month Low

The National Stock Exchange of India Ltd. reported a 23% decline in average daily notional turnover for futures and options during July, falling to Rs 214 lakh crore. This figure represents a 17-month low for the exchange. The slump followed the implementation of tighter funding rules by the Reserve Bank of India, which now requires bank guarantees to be fully backed by collateral, with at least 50% held in cash.

These regulatory shifts increased funding costs and limited leverage for local trading firms. Simultaneously, the Securities and Exchange Board of India has worked to curb retail speculation by increasing contract sizes and tightening position limits. The downturn at the National Stock Exchange contrasts with the performance of its peer, BSE Ltd., which saw its average daily notional turnover increase by 8.4% to Rs 232 lakh crore during the same period.

This volatility in trading volumes occurs as the National Stock Exchange prepares for a significant initial public offering.