BSE Stock Surges 13% Amid NSE IPO Hopes

Shares of Bombay Stock Exchange Ltd. (BSE) surged more than 13% on Wednesday, marking gains in three of the past four trading sessions. The stock reached a new all-time high during today’s session.

 

Over the last four trading sessions, shares of BSE have climbed 32%, driven by an 18% spike on Monday. Despite facing some selling pressure on Tuesday with a 3% decline, the stock rebounded today. Technically, BSE shares are now in the “overbought zone,” as indicated by a Relative Strength Index (RSI) of 80, with an RSI above 70 signaling an overbought condition.

BSE is also in the spotlight as the much-anticipated NSE IPO approaches. Last week, market regulator SEBI dismissed charges of regulatory violations against the National Stock Exchange (NSE) and seven of its former employees, including Chitra Ramkrishna and Ravi Narain, in a 2019 case related to the co-location facility, citing insufficient evidence. NSE now plans to seek a no-objection certificate from SEBI to proceed with its IPO.

 

At a board meeting on September 17, NSE set November 2, 2024, as the record date for a bonus share issue, with plans to distribute four bonus shares for every one share held by shareholders on that date. The potential NSE listing could benefit BSE, as NSE would be required to list its shares on the BSE. BSE shares are also currently listed on the NSE.

BSE stock, which had hit a low of ₹2,115 on July 23, has since climbed 80% from that level. But is there further upside for BSE?

According to Jigar Patel of Anand Rathi, BSE has shown a breakout on the weekly chart, indicating strong upward momentum. However, with the current price significantly above the breakout level of ₹3,300, the stock could be vulnerable to a pullback, possibly to the ₹3,350 or ₹3,300 range.

He advises investors to adopt a “wait and watch” approach before taking new long positions, as the weekly RSI is in the extremely overbought zone, heightening the possibility of a correction.

Currently, BSE shares are trading with a 10% gain at ₹3,661, slightly off the day’s highs.