Shares of the stock exchange BSE cracked over 6% in the trading session on Friday, July 4, as investors were concerned that the market regulator’s action against US-based trading firm Jane Street would impact trading volumes in the derivatives market.
Securities and Exchange Board of India (SEBI) barred the US trading company Jane Street from the Indian stock market, saying an investigation found it manipulated stock indices through positions taken in derivatives.
The ban on Jane Street will be in force till a final order on completion of investigations is issued.
SEBI also said it would ‘impound’ ₹4840 crore from Jane Street, which it said were the ‘unlawful gains earned’ from the alleged misconduct.
Against this backdrop, BSE share price declined over 6% to the day’s low of ₹2,647.30 on the National Stock Exchange (NSE) in morning trade today.
“The fear is that following the SEBI ban on Jane Street, F&O turnover will come down, and that is a trigger for BSE. There is already a noticeable decline in the F&O business — not just for BSE, but across the entire industry. Due to over-speculation and the fact that nearly 90% of participants are losing money, the overall sentiment has turned negative, which is also weighing on the stock,” said G Chokkalingam, Founder & MD of Equinomics Research.
Other capital market stocks like CDSL, Angel One, Nuvama Wealth Management, and Motilal Oswal Financial Services were also trading with cuts in trade.
