INDIA - The National Stock Exchange (NSE) has enforced a ban on futures and options (F&O) trading for seven stocks after they exceeded the market-wide position limit (MWPL) of 95%. The impacted companies include Balrampur Chini Mills, Bharat Heavy Electricals Limited (BHEL), Granules India Limited, Hindustan Copper, Hindustan Petroleum Corporation Limited (HPCL), Indiabulls Housing Finance, and Zee Entertainment Enterprises Limited (ZEEL). Traders are still allowed to perform cash transactions and can offset existing positions despite the new restrictions.
The ban on these securities will be lifted once their open market interest falls below the MWPL threshold of 80%. Currently, the open interest for these stocks ranges from 80.5% for ZEEL to 105.1% for BHEL. The NSE's decision to ban trading in these stocks is part of its daily monitoring to ensure that market exposure remains within acceptable limits. Traders found dealing in these stocks despite the ban may face penalties but are permitted to operate in the cash market.
Previously, on Friday, Hindustan Copper and Indiabulls Housing Finance were retained on the ban list due to their high open interests. On the other hand, India Cements Limited, Manappuram Finance Ltd, Multi Commodity Exchange of India (MCX), NMDC Limited, and RBL Bank were removed from the ban list as their open interests dropped below 80%.
While traders in indices remain unaffected by these bans, the NSE's daily updated list serves as a crucial tool for market participants to navigate the imposed trading restrictions. This regulatory vigilance comes at a time when the market is experiencing subtle shifts, with the Sensex recently declining by 0.07% and the Nifty by 0.04%. The IT sector's challenges and stagnant buyer interest have been contributing factors to these market trends, underscoring the need for traders to stay informed on regulatory changes for prudent decision-making.
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