Indian stock markets remained mostly flat on Friday, as investors cautiously assessed the implications of the Securities and Exchange Board of India's (SEBI) ban on U.S. trading firm Jane Street and monitored developments regarding a potential India-U.S. trade deal.
At 10:17 a.m. IST, the Nifty 50 index edged up by 0.04% to reach 25,415.45 points, while the BSE Sensex saw a marginal increase of 0.05%, climbing to 83,274.26. The broader market, including small-cap and mid-cap stocks, also traded without significant movement.
Jane Street Ban
SEBI's interim order against Jane Street, a prominent quantitative trading firm, has raised concerns about potential market manipulation in derivatives trading. The regulator alleges that four entities affiliated with Jane Street made substantial profits, totaling 365.02 billion rupees ($4.28 billion), across various National Stock Exchange segments between January 1, 2023, and March 31, 2025.
The order prohibits Jane Street Group and its associated entities from accessing the securities market and from buying, selling, or dealing in securities, directly or indirectly. SEBI has also directed the seizure of ₹4,843 crore, which it claims is the total amount of illegal profit made by Jane Street. Indian banks have been instructed to ensure that no funds can be withdrawn from the firm's accounts without SEBI's approval.
The ban on Jane Street has sparked concerns about its impact on trading volumes in the derivatives market. Following the announcement, shares of several capital market service providers experienced a downturn. Nuvama Wealth Management Ltd., saw its shares plunge, along with BSE and Angel One.
Despite these concerns, some analysts believe that the ban is case-specific and unlikely to trigger a widespread exodus of foreign investors. Kranthi Bathini, director of equity strategy at WealthMills Securities, suggested that while the order might cause short-term unease, it is unlikely to lead to a broad foreign investor exit.
India-U.S. Trade Deal
Investors are also closely watching the progress of a potential trade deal between India and the U.S., especially with President Donald Trump's July 9 deadline for reciprocal tariffs approaching. The market is hoping that the trade deal lifts tariff barriers on key exports to the US, including IT services, pharmaceuticals, textiles, electronics, and auto components.
Vinod Nair, head of research at Geojit Investments, noted that domestic equity markets have been consolidating after a sharp rise in the previous four months, as investors await potential trade agreement. A successful trade deal could boost bilateral trade, improve export opportunities for Indian industries, and enhance investor confidence.
Sectoral Trends
Among individual stocks, Bajaj Finance experienced a notable increase of 3.1% after reporting a 25% rise in assets under management in a pre-quarterly update. Marico also saw gains, rising by 3.6% after reporting strong revenue growth for the June quarter, driven by improving rural demand. However, Trent experienced a significant drop of 7.2%.
The Nifty Capital Markets index experienced a 1% drop following the crackdown on Jane Street, with Angel One and Nuvama Wealth Management shares tumbling.
Overall Market Sentiment
The Indian stock market has been experiencing volatility amid global economic uncertainties. Factors such as global trade tensions and concerns about corporate earnings have contributed to a cautious market sentiment.
Analysts anticipate a rangebound trend in the near term, with focus shifting to the upcoming earnings season and key macroeconomic indicators. VK Vijayakumar, chief investment strategist at Geojit Investments, suggested that a positive trigger, such as a potential India-US trade deal, could be a catalyst for the Nifty to reach its all-time high.
