India’s NIFTY50 futures market has turned markedly calmer between 2022 and 2025, but researchers warn that the apparent stability may be masking emerging vulnerabilities rather than signalling deeper resilience.
The findings were presented at the 16th Annual Finance Conference hosted by the Centre for Finance & Economics Research (CFER) at Great Lakes Institute of Management, themed “Financial Stability in a Volatile World: Risks, Resilience & Regulation.”
A study titled “Market Microstructure Metamorphosis: The Structural Reduction of High-Frequency Noise in Nifty 50 Futures” analysed millions of tick-by-tick trades between 2022 and 2025.
Authored by Professors Ranjan Chakravarty, Vishwanathan Iyer, Vivek Nagarajan and Sandeep Srivathsan, the research documents a shift from a noisy, high-frequency trading environment in 2022–23 to a smoother, persistent liquidity regime by 2025, partly driven by regulatory interventions.
However, the authors caution against complacency, introducing the concept of “Quiet Risk” — the idea that lower volatility does not automatically imply lower vulnerability.
Delivering the keynote, CRISIL Chief Economist Dharmakirti Joshi said India outperformed expectations in 2025 alongside a stronger global economy, aided by tariff exemptions, shipment frontloading to the US, diversification and services exports.
He projected 6.7% growth for 2026–27 but warned that elevated public debt, geopolitical tensions and capital flow volatility remain risks.
A second study, “Cherries, Lemons and the Market for Non-Performing Loans,” highlighted structural weaknesses in India’s secondary non-performing loans (NPL) market.
It noted persistent information asymmetry that depresses pricing and limits participation. The paper recommends selling larger portions of loan portfolios rather than cherry-picked assets to improve price discovery and deepen investor participation.
Speakers emphasised that in an era where volatility is structural, regulatory vigilance and market design reforms remain critical to safeguarding financial stability.