On Wednesday, March 5, shares of BSE (Bombay Stock Exchange) saw a sharp decline of as much as 9%, hitting a low of Rs 4,035.10 on the National Stock Exchange (NSE) during early trade. This decline came after the NSE made an important announcement regarding the change of the expiry day for Futures and Options (F&O) contracts for several key indices. The National Stock Exchange revealed that the expiry day for Nifty, Bank Nifty, FinNifty, Nifty Next50, and Nifty Midcap Select contracts would be moved from Thursday to Monday, starting from April 4, 2025.
The announcement was made through a circular issued by NSE on Tuesday, explaining the modifications in the F&O expiry schedule. The circular confirmed that the change would be applicable to the monthly contracts of the mentioned indices, effectively shifting the expiry date to the last Monday of each month.
This significant change has raised concerns among market participants, particularly traders and investors who are accustomed to the Thursday expiry day, a schedule followed for many years. The new Monday expiry rule could potentially impact trading volumes, strategies, and overall market behavior, especially in the short term.
The NSE’s decision to shift the F&O expiry dates is expected to bring a variety of changes to the trading dynamics, with analysts and experts observing how it would affect liquidity and volatility in the market. It’s believed that this alteration could align the Indian market with global standards, as many international markets already follow similar expiry schedules. However, the sudden change has led to increased uncertainty, contributing to the drop in BSE shares.
Investors have expressed mixed reactions, with some welcoming the shift, hoping it will improve liquidity and ease settlement processes. Others, however, are worried about the potential impact on their trading strategies and how it may disrupt the regular flow of market activities.
With the new expiry date coming into effect in just over a year, market participants will have time to adjust to the changes. Nonetheless, the immediate drop in BSE shares shows how sensitive the market is to policy and procedural shifts, especially when they affect trading behavior in such a direct manner.
In summary, the unexpected move by the NSE has caused a stir in the Indian equity market. The 9% slump in BSE shares reflects the uncertainty and concern among investors following the announcement. While the shift to Monday expiry for major F&O contracts is expected to bring changes to the market in the long term, its short-term effects are evident, with market players adapting to this significant shift in trading schedules.
