BSE shares slide 10% in five days on downgrades from Jefferies, Nuvama

BSE shares fell for a fifth consecutive session on Tuesday, dropping over 10% in five days, after brokerage Nuvama downgraded the stock to 'Hold' and slashed its target price to Rs 3,240, citing three key headwinds converging this financial year. The stock hit a five-month low of Rs 3,235 in the morning, having fallen nearly 27% from its May high of Rs 4,447.

Nuvama's downgrade came a day after Jefferies downgraded BSE to 'Underperform' with a target of Rs 2,940, flagging risks from domestic proprietary traders who account for about 50% of notional turnover. Jefferies also pointed to the higher securities transaction tax, RBI norms on bank guarantees, and the closing auction session (CAS) as headwinds. Nuvama said CAS has reset volumes and impaired expiry-day trading, while tighter RBI collateral norms could raise capital intensity for intermediaries.

Despite the downgrades, most analysts tracked by Bloomberg are still positive: 11 of 18 rate it a Buy, with a consensus target of Rs 4,014. Nuvama cut its FY27 EPS estimate by 6.3% and FY28 by 15%, but sees a recovery in volatility index as the largest swing factor that could lift volumes.