BSE, Angel One, Groww Stocks Fall as STT on F&O Is Raised

The mood in Dalal Street shifted quickly after the Union Budget announcement.
As soon as the government proposed a sharp increase in the Securities Transaction Tax (STT) on futures and options, capital market stocks came under heavy pressure.

What followed was a swift, broad-based sell-off across brokerage- and exchange-linked stocks.
The reaction was immediate. The message from the market was clear: higher trading costs change sentiment quickly.

Market Performance: Capital Market Stocks Crack Up to 17%

The impact of the STT hike was clearly visible during intraday trade on Sunday, February 1.
Capital market stocks declined sharply, with several names posting double-digit losses.

Key stock movements during the session:

• BSE shares fell nearly 15%

• IIFL Capital Services declined by around 17.5%

• Groww shares slipped close to 14%

• Angel One dropped nearly 13%

The selling was not limited to individual stocks.
The broader market also reacted to the announcement.

• BSE Sensex fell by up to 2.9%

• Nifty 50 declined by up to 2.9%

This reflected a wider concern around how higher transaction costs could affect trading activity.

Government Raises STT on Futures and Options

At the heart of the market reaction was a major change announced in the Budget.

The government proposed a significant hike in STT on equity derivatives:

• STT on futures increased to 0.05% from 0.02%

• STT on options raised to 0.15% from 0.01%

This represents an increase of more than 50% in transaction tax on futures contracts.

The announcement raised concerns around:

• Higher trading costs

• Possible moderation in derivatives volumes

• Impact on businesses closely linked to F&O activity

Given the heavy dependence of capital market firms on derivatives trading, the market reacted sharply.

Why Capital Market Stocks Felt the Pressure

Stocks in capital markets tend to move in line with trading volume.
Any change that directly affects transaction costs immediately reflects in stock prices.

The STT hike led to concerns that:

• Trading in the F&O segment could slow down

• Volume-dependent businesses may face near-term pressure

• Short-term trading activity could moderate

As a result, stocks listed on exchanges and brokerage platforms saw stronger selling than the broader market.

Company Details: Stocks Most Impacted

BSE

BSE emerged as one of the worst-affected stocks during the session.
Its share price declined nearly 15%, reflecting concerns around derivatives volume sensitivity.

IIFL Capital Services

IIFL Capital Services saw the steepest fall among peers, with shares sliding around 17.5% intraday.

Groww

Recently listed Groww shares fell nearly 14% after higher costs in the derivatives ecosystem.

Angel One

Angel One shares declined nearly 13%, tracking the broader weakness across brokerage stocks.

Impact on Derivatives and Market Sentiment

The hike in STT reinforced the government’s intent to moderate activity in the futures and options segment.
As trading costs rose, sentiment among high-volume stocks turned cautious.

The focus shifted from growth to sustainability, with markets reassessing how higher taxes could influence participation levels in derivatives.

Foreign Investor Angle: A Short-Term Sentiment Check

The STT hike also came at a time when foreign portfolio investors were already cautious.

As per available data:

• Equity outflows crossed ₹41,000 crore in January 2026

This reflected broader global factors, including risk-off sentiment, currency pressures, and global bond yields.
Higher transaction taxes added another layer of caution, especially for derivative-focused trading activity.

Summary: What This Means for the Market

The sharp fall in capital market stocks highlights how sensitive markets are to policy changes.
A single announcement around transaction costs was enough to shift sentiment across stocks linked to trading activity.   

Key takeaways from the STT hike reaction:

• Capital market stocks declined up to 17%

• STT on futures and options was raised significantly

• Broader indices like Sensex and Nifty fell up to 2.9%

• Market sentiment turned cautious around derivatives volumes
  
  

source: Livemint