Impact of NSE’s Removal of 34 Indian Stocks from Futures and Options Segment

The National Stock Exchange (NSE) recently announced that it will discontinue futures and options (FO) contracts for 34 Indian stocks from June 28 onwards. This move was made to maintain the eligibility and performance criteria for stocks listed in the futures and options segment. In this article, we will delve into the details of the impacted stocks and the potential implications this action could have on their share prices.

Overview of the Exclusions

The NSE's decision to exclude these 34 stocks from the futures and options trading platform comes as a result of a comprehensive review of the stocks that are currently available for trading in the FO segment. The NSE checks the eligibility criteria for these stocks every year to ensure they meet the necessary standards.

According to Chandan Taparia, a derivatives and technical analyst at Motilal Oswal Securities, “As per the enhanced criteria, these stocks don’t fulfil the criteria. Most of these stocks have not performed well recently.” The removal of these stocks means that no new contracts will be available for trading in July, leading to potential liquidation pressure on the remaining contracts.

The 34 Excluded Stocks

Ajanta Pharma Allahabad Bank BEML Canfin Homes CEAT CG Power Chennai Petro DCB Bank Godfrey Phillips Godrej Industries Gujarat State Fertiliser IDFC IFCI India Cements Indian Bank Infibeam IRB Infra Jet Airways Jain Irrigation Kaveri Seed Karnataka Bank MRPL NHPC Oriental Bank PC Jeweller Repco Home Reliance Power South Indian Bank Suzlon Syndicate Bank Tata Communications TV18 Broadcast VGuard Industries Wockhardt

Market Impact and Future Outlook

The removal of these 34 stocks from the futures and options segment could have significant implications for their share prices. Investors may experience increased pressure to liquidate their positions, especially as there will be no new contracts available for these stocks in the future. This could lead to a decline in demand and potentially a decrease in share prices.

Investors should closely monitor these stocks and consider whether the removal from the futures and options segment justifies any further investment activity. It is also advisable to stay updated on any further announcements or regulatory changes that may impact these stocks.

Conclusion

The NSE’s decision to discontinue futures and options contracts for these 34 Indian stocks is a regulatory move aimed at maintaining the integrity and performance standards of the futures and options segment. While this action may initially impact the share prices of these companies, the long-term implications will depend on their ability to meet the enhanced criteria set by the NSE in the future.

For the latest list of excluded stocks and details, you can visit the NSE website and download the excel sheet of the stock list from the provided links.

Note: This article reflects the information available at the time of writing and may be subject to change.

Source: National Stock Exchange of India Ltd.

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