BSE, Nuvama, CDSL fall up to 7% on F&O volume concerns as headwinds rise

BSE, Angel One, and CDSL shares fell sharply on Tuesday amid fears of declining F&O volumes and regulatory headwinds

Shares of capital market stocks plunged in trade on Tuesday as the securities market regulator's latest report on retail investors' losses hurt sentiment among traders.

 

Further, the negative sentiment for the sector also came for these stocks amid reports that the Securities and Exchange Board of India (Sebi) is likely to consider linking options and cash exposure, leading to reduced options liquidity. 

 

The stock price of bourse Bombay Stock Exchange (BSE) fell as much as 7.5 per cent on the NSE to ₹2,437.7 per share. Angel One shares tumbled 6.35 per cent to ₹2,617, while the depository CDSL fell 2.8 per cent. 

 

 

Stocks came under pressure after Sebi banned Jane Street from the securities market, sparking concerns that derivative volumes could decline. This, in turn, is expected to weigh on exchanges and broking platforms.  Track LIVE Stock Market Updates Here

Retail traders losses in F&O widens in FY25

The market regulator’s new study showed that individual traders’ net losses rose to ₹105,603 trillion in FY25, compared to ₹74,812 crore in FY24, after accounting for transaction costs. Over 91 per cent of traders made losses in the equity derivatives segment, broadly unchanged from the previous study.

 

In the last six months, the number of overall unique traders dealing in F&O saw a 20 per cent decline compared to the previous year. Further, traders with a total turnover of less than Rs 1 lakh witnessed a significant decline compared to the previous year.

 

Index options turnover, year on year, has declined by 9 per cent in premium terms and 29 per cent in notional terms. However, compared to two years ago, index options volume is up by 14 per cent in premium terms and 42 per cent in notional terms.

 

The decline was also attributed to the rollout of new measures by the market regulator to curb speculation and hyperactivity in the F&O segment, including limiting weekly expiries and increasing lot sizes. 

Sebi to consider linking options and cash exposure: reports

The negative sentiment also came amid reports that the Sebi board is likely to consider linking options and cash exposure. This would increase cash market liquidity while curtailing options liquidity, reports said. Further, the regulator may also discuss other steps to curb retail trading in options and increase cash market volumes. 

Jane Street impact

While it's too soon to assess the impact of the Jane Street ban on derivatives volumes, analysts said that it may hit trading volumes in options as the US firm was a large player in the segment. 

 

The key unknown is whether this instance can lead to a knock-on impact on trading volumes,” Jefferies said in a note dated July 6. It added that trends during this week on derivatives volumes will be key to watch, especially the index derivatives expiries on Tuesday and Thursday. 

 

The impact on volumes could be partly offset by a pickup in activity by proprietary firms and other high-frequency traders, Jefferies said. 

 

The impact of Jane Street’s ban on BSE’s earnings is expected to be limited, as the firm likely contributed only around 1 per cent of turnover. However, Nuvama Wealth could see a 5–6 per cent revenue hit and a 7–8 per cent earnings impact, given Jane Street's estimated 15–20 per cent share in its asset services business, Jefferies said.