BSE, Groww & Other Capital Market Stocks Under Pressure After Budget 2026: STT Hike Clouds Near-Term Outlook

Capital market stocks today stayed under pressure despite a brief rebound in early trade on February 2, a day after sharp selling triggered by key announcements in the Union Budget 2026. While select stocks attempted a recovery, concerns around higher transaction costs in the derivatives segment continue to weigh on sentiment.

The Nifty Capital Markets index rose over 1% in morning trade to 4,438.95, bouncing back from the previous session's steep fall. However, gains proved short-lived as investors reassessed the impact of the Budget's proposal to increase Securities Transaction Tax (STT) on futures and options (F&O).

Budget 2026: STT on F&O Increased

During the Budget 2026 speech, Finance Minister Nirmala Sitharaman announced an increase in STT on futures contracts to 0.05% from 0.02% a move that caught market participants off guard. Traders had largely expected some form of relief, given the recent slowdown in derivatives volumes.

In practical terms For every Rs. 1 lakh worth of futures sold, traders will now pay Rs. 20 in STT, compared with Rs. 12.50 earlier.

For a Rs. 10,000 options contract sale, STT has risen to Rs. 10 from Rs. 6.25. The sharper-than-expected hike became a key trigger for the sell-off in capital market stocks, particularly those heavily dependent on F&O activity.

Structural Headwinds for Capital Market Ecosystem

"The Finance Minister's proposal to raise STT on futures to 0.05% is structurally negative for the capital market ecosystem, particularly F&O-driven businesses. Higher transaction costs are likely to reduce trading volumes, dampen short-term momentum, and lower profitability for active market participants," said Raj Gaikar, Research Analyst, SAMCO Securities.

"FII participation in derivatives may also moderate as post-tax trading efficiency declines, impacting overall liquidity. This can create a cascading effect on revenue streams of broking companies, exchanges, AMCs, and depositories, which are closely linked to market turnover. With derivatives volumes already shrinking in recent months, the hike may further pressure near-term earnings visibility. While fiscally supportive, the measure poses headwinds for capital-market-linked stocks," he further.

Capital Market Stocks Recent Performance

On the stock-specific front, performance remained mixed:

Nuvama Wealth Management shares gained around 2% in early trade but pared gains later in the session.

Angel One and Motilal Oswal Financial Services rose over 1% each.

BSE shares climbed 2.4% to trade near Rs. 2,640 apiece.

HDFC Asset Management Company and Computer Age Management Services (CAMS) gained around 1% each.

Meanwhile, several other capital market stocks continued to trade in the red for the second consecutive session, including Central Depository Services (CDSL), Indian Energy Exchange (IEX), Anand Rathi Wealth, and Multi-Commodity Exchange (MCX).

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