BSE shares hit record high; here's what analysts have to say

Shares of BSE Ltd continued their upward move for the third straight session on Monday, rising 2.28 per cent to hit an all-time high of Rs 2,735.20. The stock eventually settled 0.71 per cent up at Rs 2,693. At this closing price, it has rallied 48.89 per cent on a year-to-date (YTD) basis. BSE was among the most active counters (in terms of value) today as around 1.10 crore shares worth Rs 2,964.46 crore changed hands on National Stock Exchange (NSE).

A market expert noted that a valuation play is underway in BSE shares, driven by the much-anticipated initial public offering (IPO) of NSE. However, another expert highlighted that a mean reversion towards the Rs 2,468 level could be on the cards.

"There has been high trading volume and activity in BSE shares. Currently, a valuation play is underway in anticipation of NSE's upcoming IPO. When a major player like NSE is preparing to go public, it obviously brings attention to the second-largest exchange by market share — BSE — as investors look to realign valuations. This could be the key reason behind the recent rise in BSE's stock," said Prashanth Tapse, Senior VP (Research) at Mehta Equities, in an interview with Business Today.

"BSE shares hit a fresh all-time high today, signalling exhaustion on charts. A mean reversion towards Rs 2,468 is likely, coinciding with a previous swing high. Also, volumes have been declining during the last leg of the rally, indicating trend weakness. The swing low at Rs 2,385 is the last line of defence for the bulls and a breach below this level could trigger a deeper mean reversion on weekly charts," said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

NSE, the country's largest stock exchange, has been working towards its IPO for several years. Regulatory hurdles and governance issues had delayed the listing but it now appears that the exchange has made substantial progress in securing necessary clearances from the Securities and Exchange Board of India (Sebi).

Sebi chairperson Tuhin Kanta Pandey, speaking at a recent event, confirmed that regulatory issues delaying NSE's IPO are largely being addressed. "All the outstanding issues will be resolved and we will move forward. I can't give you the timeline, but it will be done soon. NSE and Sebi are talking. They are resolving the issues," the Sebi chief said.