SEBI's CAS review could boost BSE's daily turnover to Rs 230 bn

Indian equity markets may see stronger activity on volume recovery. A favourable SEBI review of CAS methodology could boost BSE’s average daily premium turnover to Rs 220–230 billion, notes a Nuvama report, despite cautious broader market sentiment.

Market Outlook and BSE's Potential

Indian equity markets could see stronger activity ahead as trading volumes recover, while a favourable outcome from the Securities and Exchange Board of India’s (SEBI) review of the CAS methodology could support BSE’s average daily premium turnover value (ADPTV) at Rs 220–230 billion, according to a Nuvama Institutional Equities report.

The average daily premium turnover value is the total amount of option premiums actually paid by traders divided by the number of trading days in a specific period. Nuvama noted, BSE’s average daily premium turnover value (ADPTV) stood at Rs 228 billion, up 18.4 per cent week-on-week, compared with an 18.1 per cent rise for the industry and against its remaining FY27 estimate of Rs 186 billion.

At the same time, the average daily contracts traded declined 3.1 per cent week-on-week to 115 million, compared with 98 million in August 2026 and 150 million in July 2026. However, premium per contract increased 22.2 per cent week-on-week to Rs 1,986, from Rs 1,897 in August and Rs 1,688 in July.

“Overall it resulted in a premium per contract of INR1,986 (+22.2 per cent WoW) versus INR1,897/1,688 for Aug26/Jul-26. BSE ADPTV MS at 35.0 per cent (+6.9 bp WoW),” the report said. For FY27 to date, BSE’s ADPTV stood at around Rs 265 billion, with an ADPTV market share of approximately 35.2 per cent and a premium-to-notional turnover ratio of about 12.4 basis points, compared with 17.2 basis points for the industry.

SEBI's Review on Derivatives Settlement

Against this backdrop, Nuvama highlighted, "Volumes rebounded sharply and SEBI's upcoming review of CAS methodology,” stressing that a “favourable revision could lift ADPTV back to the INR220–230bn range.” The market regulator said on earlier that it may propose changes to the methodology for determining settlement prices for derivative contracts, following feedback from market participants on using CAS-based closing prices for expiry settlements. A consultation paper on the proposed changes is expected to be released within about a week.

Broader Market Cautious

Meanwhile, broader market sentiment remains cautious amid geopolitical concerns and rising crude oil prices. Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking, noted benchmark indices extended decline for the fourth week in a row as a sharp surge in crude oil prices amid escalating geopolitical tensions in West Asia weighed heavily on investor sentiment.

“Nifty closed lower for four out of the five trading sessions during last week. It started the week on a negative note and formed a weekly low of 23,786 on Wednesday’s session. Buying demand at lower levels saw the index close off the lows at 23,897 levels down by 1.2 per cent,” he said, adding, “Broader markets were mixed, with Nifty Midcap witnessing profit booking and closing the week lower by 1.5 per cent, while Nifty Small Cap closed the week higher by 0.1 per cent.”

Factors to Watch

Looking ahead, Mukherjee added, “Market participants will remain focused on Brent crude price movements, evolving US-Iran geopolitical tensions, and upcoming inflation data from the US ahead of the Federal Reserve's mid-September policy meeting.” (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)