Investors seem to have turned bullish on interest rate futures (IRF) as capital markets registered about 21 per cent jump in turnover at nearly Rs 68,690 crore in June compared with the preceding month.
Trading value from IRF -- on BSE, NSE and MSEI -- cumulatively stood at Rs 56,831 crore in May, latest exchange data showed.
Besides, turnover in IRF in June is more than two times the figure in the same month last year. In June this year, NSE saw trading worth Rs 62,055.46 crore in IRF, up from Rs 51,663 crore in May.
IRF trading value on BSE stood at Rs 3,665.13 crore last month as against Rs 3,031 crore in May.
Besides, MSEI recorded a turnover of Rs 2,969.16 crore in the segment in June as against Rs 2,137 crore in the previous month.
Data showed that a total of about 33 lakh contracts were traded on the three exchanges in June, an increase of 23 per cent. About 27.5 lakh contracts were traded on the bourses in May this year.
Live trading in IRF in long tenure 10-year government bonds had begun on the stock exchanges in January last year, following approval by the market regulator.
The product had been a long-pending demand from market participants and is considered as one of the most liquid debt paper instruments in the country.
An IRF is generally a contract between a buyer and a seller agreeing to the future delivery of any interest-bearing asset such as government bonds.
The cash-settled IRFs provides market participants with a better option to hedge risks arising from fluctuations in interest rates, which depend on various factors including RBI policy, demand for liquidity and flow of overseas funds.
Banks, primary dealers, mutual funds, insurance companies, FIIs, corporates and brokers as well as retail investors can trade in this product.
