BSE shares surge 5% after Jefferies upgrades to hold rating, raises target price
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Shares of Asia's oldest stock exchange, BSE Ltd, surged 4.9% on Tuesday to Rs 5,408.95 on the National Stock Exchange (NSE) after brokerage firm Jefferies upgraded its rating on the bourse to ‘hold’ from ‘underweight’ and significantly increased the target price to Rs 5,250 from Rs 3,500 earlier. The upgrade reflects Jefferies' optimism about potential earnings upgrades for BSE Ltd, despite the adverse impact of recent measures by the Securities and Exchange Board of India (Sebi) on the derivatives market. According to Jefferies, Sebi's new futures and options (F&O) rules, which mandate larger lot sizes, initially caused a sharp 70% drop in options contract volumes. However, the decline in premiums has been less severe than expected, falling by less than 10% month-to-date in January against the firm’s anticipated 25% decline, the brokerage noted. Jefferies said that while the measures have pressured discount brokers, whose...