India Budget Proposal to Raise STT on Futures Negative for Capital Mkts -- Market Talk

Dow Jones02-01 16:35

0835 GMT - The Indian budget's proposal to raise the Securities Transaction Tax on futures to 0.05% from 0.02% is negative and poses headwinds for capital-market-linked stocks, says Raj Gaikar at Samco Securities. Higher transaction costs are likely to reduce trading volumes, dampen short-term momentum, and lower profitability for active market participants, the research analyst says in an email. Foreign institutional investment participation in derivatives may also moderate, impacting overall liquidity. This can create a cascading effect on revenue streams of broking companies, exchanges, and depositories, which are closely linked to market turnover, Gaikar adds. (monica.gupta@wsj.com)

(END) Dow Jones Newswires

February 01, 2026 03:35 ET (08:35 GMT)

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Foreign institutional investment participation in derivatives may also moderate, impacting overall liquidity. This can create a cascading effect on revenue streams of broking companies, exchanges, and depositories, which are closely linked to market turnover, Gaikar adds. 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Higher transaction costs are likely to reduce trading volumes, dampen short-term momentum, and lower profitability for active market participants, the research analyst says in an email. Foreign institutional investment participation in derivatives may also moderate, impacting overall liquidity. This can create a cascading effect on revenue streams of broking companies, exchanges, and depositories, which are closely linked to market turnover, Gaikar adds. 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