Sibi action on Jane Street Earthquake in the market
There was a stir in the Indian stock market on Friday, when SEBI investigation saw a huge decline in the shares of four big capital market stocks. This decline revealed the dependence of the market, as SEBI's action on a foreign trading firm Jane Street gave a shock to not only, but its Indian partners and the entire derivatives market. As a result, a market value of about Rs 12,000 crore was cleared in a single day.
Nuwama's biggest shock, 11.26% broken share
Jane Street's Indian trading partner Nuwama Wealth Management suffered the most loss in this uproar. On Friday, its shares fell up to 11.26%, while SEBI investigation did not reveal any wrongdoing. Nevertheless, investors started selling shares in fear, as a large client like Jane Street could affect Nuwama's earnings.
In addition, stock exchange BSE and Broking firm Angel One shares also broke around 6%, while Central Depository Services (CDSL) shares recorded a decline of more than 2%. The market value of these four companies caused a total loss of Rs 12,000 crore.
Accused of manipulating bank Nifty index options
Market regulator SEBI has accused Jane Street and its associate companies of manipulating bank Nifty Index Options and Underlining Stocks. SEBI has ordered these firms to refund illegal earnings of Rs 4,844 crore. This action was about the alleged disturbances of Jane Street, but it affected the entire market.
Prop trading firms like Gen Street handle about 50% of the options trading in the Indian market. Jirodha founder Nitin Kamath expressed concern over this and said, “If such firms retreat from the market, retail trading (which is about 35% volume) can also have a bad effect. It is bad news for both exchanges and brokers.”
The importance of Gen Street in the market can be gauged from the fact that a firm has half of the options trading. If this firm leaves the market, then there may be a big question on liquidity and trading volume.
High-frequency trading will affect
Siddharth Bhamre, Head of Institutional Research of Asit C. Mehta, said, “Jane Street is one of the biggest traders in the Indian market. When such big firms are banned for wrongdoing, the rest of the players also become alert and reduce their activities. This can reduce the trading volume.” He further said that traders will now get less countersparties, which may further decline in F&O (Fuzzo and Options) volumes.
Ashish Nanda, President and Chief Digital Business Officer of Kotak Securities, said that this action could have a major impact on High-Frequency Trading (HFT) firms. He said, “HFT firms bring a lot of liquidity to the market. If their activities are low, then retail volume will also be affected. Many firms will now be considering their strategies again.”
Retail investors dominated
However, some people are optimistic about this situation. Angel One founder Dinesh Thakkar says that India's market opportunity is structural and not cyclical. He said, “Retail investors' share in equity derivatives in 2018 was only 2%, which has increased to more than 40% in 2025. It shows that the market foundation is strong and it is not dependent on any one firm.”
Thakkar further said, “When one player goes out, the other takes his place, and that too quickly.” She referred to global trading firms such as Citadale Securities, IMC Trading, Opter, Jump Trading and Millennium, which are increasing their presence in India. These firms are making local units, hiring talent and investing in infrastructure.
Source: www.tv9hindi.com
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