Archive · 2 Feb 2026
STT Hike Sparks Market Volatility and Brokerage Stock Falls
The Indian stock market saw a big drop after the government increased a tax called STT on futures and options.
This tax makes trading more expensive, so many people sold their shares quickly.
Some companies that help people trade, like Angel One and Groww, saw their shares drop a lot.
Experts think this might make people trade less, but they also say the market will probably get better soon because the government is still spending a lot on important things like roads and buildings.
The tax increase is meant to make people focus more on long-term investing instead of quick trades.
The market lost a huge amount of money, around ₹11 lakh crore, and experts are watching to see how foreign investors react to the changes.
Shares of broking firms like BSE, Angel One, Groww, and IIFL Capital Services fell sharply due to an increase in Securities Transaction Tax (STT) on futures and options.
STT on futures was raised to 0.05% from 0.02%, and STT on options was increased to 0.15% from 0.1%, leading to higher trading costs.
The Nifty 50 index fell to its September 30 swing low of 24,587 before a small recovery, with the market losing around ₹11 lakh crore in market capitalization.
Analysts believe the STT hike could reduce trading volumes and impact the profitability of broking firms, but the long-term market outlook remains positive due to strong fiscal policies and infrastructure investments.
Experts suggest that the market correction is likely to be short-lived, as long-term investors will focus on fundamentals like earnings visibility and government spending on infrastructure.
- Who
- Indian stock market participants, including broking firms and investors
- What
- A sharp decline in stock prices and brokerage firm shares due to an increase in Securities Transaction Tax (STT) on futures and options
- When
- February 1, 2026
- Where
- India
- Why
- The increase in STT on derivatives is expected to reduce trading volumes and impact the profitability of broking firms, leading to a sell-off in their shares and a broader market correction
- STT on Futures
- 0.05% (up from 0.02%)
- STT on Options
- 0.15% (up from 0.1%)
- Angel One Share Drop
- 13%
- Groww Share Drop
- 14%
- IIFL Capital Services Share Drop
- 17%
- BSE Share Drop
- 8%
- CDSL Share Drop
- 7%
- Market Capitalization Loss
- ₹11 lakh crore
- Nifty 50 Low
- 24,587
- Nifty Bank Low
- 58,000
Sources
BSE, Angel One, Groww, Nuvama, IIFL shares fall as STT hike sparks volume worries
STT recalibration to encourage investors focus on long-term equity participation: BSE CEO
Nifty 50, Sensex crash 2% on STT hike — Will this stock market correction be short lived? Explained
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Budget 2026: Govt increases STT on F&O trading to curb speculation
Sensex Today | Stock Market LIVE Updates: Nifty bulls, rupee brace for FII reaction to STT hike after ₹11 lakh crore rout
Stocks to watch today: From textiles to defence – Key sectors and stocks to track after Budget 2026
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