NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance

NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance
NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance
NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance
NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance

NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance

NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance

NSE Imposes Trading Ban on Delta Corp, Indiabulls Housing Finance, and Manappuram Finance

As of October 5, 2023, the National Stock Exchange (NSE) has imposed a trading ban on three stocks: Delta Corp, Indiabulls Housing Finance, and Manappuram Finance. This action is a consequence of these stocks surpassing the market-wide position limit (MWPL) threshold of 95% in the futures and options (F&O) segment. However, these stocks will continue to be available for trading in the cash market.

Key Details of the Trading Ban

The NSE has clarified that no new positions in these stocks will be permitted during the duration of the F&O ban. Traders will only have the option to reduce their existing positions through offsetting positions. Any attempt to increase open positions will result in punitive measures. The trading ban aligns with the exchange’s efforts to regulate the market and mitigate excessive speculative activities that could disrupt market stability.

Market Performance Amidst the Ban

The imposition of the trading ban coincides with a two-day decline in domestic equity benchmarks. This decline is concurrent with a significant uptick in US bond yields and the US dollar. The BSE Midcap index has registered a loss of 1.52%, while the BSE Smallcap index has experienced a decline of 0.96%. Both the Sensex and Nifty 50 indices have retraced approximately 4% from their all-time highs achieved the previous month.

Prior Instances of the Ban

This is not the first occurrence of stocks being subjected to a trading ban. On September 26, 2023, five stocks—Balrampur Chini Mills Ltd, Canara Bank Ltd, Granules India, Hindustan Copper Ltd, and Indiabulls Housing Finance Ltd—were placed under a similar ban due to their crossing of the 95% MWPL threshold. During this period, trading in these stocks was restricted solely to the cash market.

Impact on Traders

Traders should remain vigilant regarding such bans as they can significantly influence trading strategies. The F&O ban rule serves to curtail speculative activity in specific stocks. When a stock’s open interest surpasses 95% of the MWPL, the stock’s F&O contracts enter a ban period. During this time, traders are prohibited from initiating new positions in these stocks, although they retain the ability to reduce existing positions. The ban is lifted only when the open interest falls below 80% of the MWPL.

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