Indian benchmark indices end slightly higher after a volatile session on Friday
Despite the green close, market sentiment remained subdued, with traders reluctant to take large positions amid geopolitical uncertainties and ongoing global trade tensions. The broader markets reflected a mixed tone. The Nifty Midcap 100 ended flat with a slight negative bias, while the Nifty Smallcap 100 inched up just 0.03 percent.
Investor focus remained on two key themes: the looming US-India trade tariff deadline and regulatory developments within India. Of particular note was SEBI's interim action against global trading firm Jane Street, which led to significant selling pressure in broking stocks. Shares of companies like Angel One and BSE fell sharply, by around 6 percent, amid concerns about tighter oversight in the derivatives market.
In sectoral performance, large-cap IT and FMCG stocks helped support the indices, with stocks like Infosys, TCS, and HUL posting modest gains. On the other hand, weakness was seen in banking, real estate, and metal counters. Among the top movers, Marico rose around 3.6 percent on the back of strong rural demand commentary, while Bajaj Finance gained over 3 percent after an uptick in its assets under management. Meanwhile, Trent fell sharply by about 7 percent due to signs of slowing revenue growth for the June quarter.
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Mint
24 minutes ago
- Mint
India makes a push for cheaper foreign loans in yen, rupee
India is pressing multilateral development banks (MDBs) to lend more in Japanese yen and Indian rupees in an attempt to reduce borrowing costs and manage exchange rate risks more effectively, two officials aware of the matter said. New Delhi has steadily expanded loans and official development assistance (ODA) in yen to gain from ultra-low interest rates and the rupee's appreciation against the Japanese currency. Many of these loans finance infrastructure and development projects. 'Yen rates remain close to zero, and with the rupee having appreciated significantly against the yen since early 2023, yen borrowings, including through Samurai bonds, have emerged as a compelling option," one of the two officials cited above said, requesting anonymity. Samurai bonds are yen-denominated bonds issued in Japan by foreign entities to raise money. The development assumes significance since MDBs such as the World Bank, Asian Development Bank (ADB) and the International Monetary Fund (IMF) play a central role in global finance, especially in developing economies. These institutions lend in dollar as well as other reserve currencies. ADB, which mainly lends in dollars, has also issued rupee bonds. The Asian Infrastructure Investment Bank (AIIB) too lends in yen, euro and rupees. The yen is part of IMF's special drawing rights (SDR) basket of currencies, and can be used depending on borrower preference and availability. India is pushing for loans in yen, the second official confirmed, adding "These loans and ODAs are not free, and we pay interest on them. A lot has changed now with India's rise at the global high table, and we are in a better position to negotiate our terms and conditions with the MDBs," said the second person. 'Also, given our past record, India also happens to be very attractive for these lending institutions as well, given our repayment history and the credit profile. We will follow the strategy which is in our best interest," the person added. An ADB spokesperson said the bank has received a handful of requests from India for yen-denominated loans in the last two years, with three such agreements signed in 2023 and 2024. These include the Delhi-Meerut RRTS Tranche 3 (2023), the Nagpur Metro Urban Mobility Project (2024) and the Amaravati Capital City Development Programme (2024). The ADB spokesperson pointed out that despite the rising interest in yen loans, 20 out of 22 sovereign loans signed by ADB in India in 2024 were in dollars. 'ADB's advice to borrowers is to choose the most financially advantageous termsbased on needs and risk exposure of the project and the borrower's overall external debt portfolio," the spokesperson added. Queries emailed to the spokespersons of India's finance ministry, World Bank, AIIB, IMF and Exim Bank remained unanswered. 'India is expected to expand its yen exposure further as part of a calibrated shift to longer-tenure, lower-cost financing to mitigate exchange rate risks. It will also explore greater use of the domestic currency. However, the dollar will remain dominant in the medium term, given its role as the principal global reserve currency," the official cited earlier said. According to the Reserve Bank of India (RBI) data, yen-denominated liabilities rose to 6.2% of India's total external debt at the end of March 2025, up from 5.8% a year earlier. In absolute terms, this equals $45.6 billion out of the total $736.3 billion in external debt at the end of FY25. India's total external debt rose 10% in FY25. The US dollar still dominated India's external borrowings, accounting for 54.2%, followed by the Indian rupee (31.1%), yen (6.2%), SDR (4.6%), and the euro (3.2%). While the appeal of yen financing is clear, economists caution that since India lacks a deep forex market for the yen, most conversions still happen through cross-rates with the dollar or euro rather than direct market-determined rates, adding layers of complexity. 'Rupee-denominated loans are preferable from a stability standpoint. As for yen borrowings, unless a more efficient and transparent yen market develops, the advantages remain limited. In many cases, dollar- or SDR-denominated loans might still be more practical," said Bhanumurthy N.R., director of the Madras School of Economics. India's yen borrowing strategy is gaining traction across both bilateral and multilateral channels. In FY24 alone, India signed yen loan agreements with the Japan International Cooperation Agency (JICA) worth over ¥276 billion (around ₹15,600 crore), funding metro rail, logistics, and renewable energy projects. In FY25, JICA followed up with six ODA agreements worth ¥191.7 billion ( ₹11,181 crore) to support urban transport, water infrastructure, environmental protection, and livelihood programmes, including Delhi Metro Phase IV, Chennai's desalination plant, biodiversity projects in Punjab, and an aquaculture initiative in Assam. A separate ¥84.3 billion loan for Mumbai Metro Line 3 took the year's total to ¥276 billion ( ₹15,655 crore). 'India's push to secure more yen- and rupee-denominated loans from MDBs reflects a prudent effort to lower external borrowing costs while reducing exposure to the volatility of major foreign currencies like the US dollar," said Venkatakrishnan Srinivasan, managing partner at Rockfort Fincap Llp, a financial advisory firm. 'From a bond market and risk perspective, rupee-denominated MDB funding is a strong fit. It eliminates currency mismatch, enhances debt predictability, and aligns well with India's broader strategy of deepening its local currency bond ecosystem. Yen-denominated loans, though historically low-cost, now come with added complexity due to heightened forex volatility and an uncertain interest rate trajectory in Japan," he added.
Time of India
25 minutes ago
- Time of India
All in a day: Buy stocks, bet against them in options market, then cash out
Established in Aug 1999, The New York-headquartered Jane Street has offices across the world. In June 2025, one of its co-founders was alleged to have financed a coup to topple the govt in South Sudan. Tired of too many ads? go ad free now The person then said he was duped into funding the coup. Sam Bankman-Fried, once the poster boy of the crypto world and now a convicted fraudster, once worked at Jane St. What led to Sebi's actions? Four Jane St entities operated in India as registered foreign portfolio investors. The regulator banned the four entities from the market. Sebi also asked the entities to jointly disgorge illegal gains worth nearly Rs 4,850 crore. Sebi said Jane St had used two key strategies to manipulate the domestic stocks and futures & options (F&O) markets to make illegal gains over several years. How did Jane St manipulate stocks? One of the strategies was to aggressively buy Bank Nifty's constituent stocks and futures in the morning. At the same time, it would buy put options on the index. In the afternoon, it would sell stocks bought in the morning. This selling pushed up prices of options on Bank Nifty, which the fund had bought in the morning. Once put option prices rose, those were sold to make huge profits. The other strategy was concentrated selling or buying of Nifty index options in the last two hours of the expiry day to swing index levels to profit from such trades. So, what happens next? The fund has been asked to present its side of the case to Sebi within 21 days. Sebi is expected to expand the scope of its investigations into the trading operations of Jane St in India. The interim order focuses on the Jan 2023 to March 2025 period. The regulator is also expected to investigate if manipulative strategies were used in other indices and in BSE's segments.
Mint
36 minutes ago
- Mint
Street theatre: Sebi pins down Jane Street for manipulation
The market regulator on Friday barred four entities of US-headquartered Jane Street Group from accessing the securities market until they deposit alleged illegal gains into an escrow account, rattling shares of capital market-related companies and the broader financial services sector. In one of the biggest crackdowns in India's equity market, the Securities and Exchange Board of India (Sebi) ordered seizing ₹4,843 crore from the group, one of the most influential players in the global derivatives markets, citing prima facie evidence of index manipulation and fraudulent trading practices. The Sebi interim order also froze the bank and demat accounts of the four entities, and directed all custodians, banks, depositories, and registrar agents to block any transfers or redemptions involving the entities' assets without its approval. Fear factor Capital market-related stocks plunged on fears of a fall in volumes. Shares of BSE tanked 6.55% to ₹2,635.2 while Nuvama, a trading partner of Jane Street in India, dropped 11.2% to ₹7,310. Angel One, the third-largest retail broking house, plunged 5.9% to ₹2,776. Depository CDSL, a subsidiary of BSE, shed 2.3% to ₹1,762.5. Others like Motilal Oswal Financial Services and Aditya Birla Sun Life MF slipped by 1.3–1.6%. "Jane Street disputes the findings of the Sebi interim order and will further engage with the regulator. Jane Street is committed to operating in compliance with all regulations in the regions we operate around the world," the group said in a statement to Mint. The Sebi order cited what it describes as 'prima facie" evidence of two distinct but coordinated manipulation strategies: 'intraday index manipulation" (seen on 15 days) and 'extended marking the close" (seen on 3 days), particularly on index expiry days. A further instance of similar manipulation was recorded on 15 May 2025, in defiance of prior regulatory warnings. Index manipulation Sebi said Jane Street exploited expiry-day dynamics in index derivatives. It held large options positions early in the day—typically puts (bearish bets) or calls (bullish bets)—and then moved prices in the cash and futures markets to benefit its options book. On expiry mornings, it would push Bank Nifty up by aggressively buying constituent stocks and futures, only to reverse positions by midday to engineer a fall—boosting the value of its put options. Across all the 18 days identified by Sebi for investigation within the examination period, Jane Street earned ₹43,289 crore in index options and another ₹900 crore in stock options, while making losses of ₹7,208 crore in stock futures, ₹191 crore in index futures, and ₹288 crore in cash equity. The net profit earned by the group stood at ₹36,502 crore. On 17 January 2024, Sebi found that Jane Street earned ₹734.93 crore in options, while losing ₹61.6 crore in cash and futures—what Sebi calls the 'cost of manipulation." That day, Bank Nifty opened 3.2% lower, driven by poor earnings from HDFC Bank. Between 9:15 am and 11:47 am, Jane Street purchased ₹4,370 crore worth of Bank Nifty constituent stocks and futures. This pushed the index up, misleading the market. Then, it created ₹32,114.96 crore in bearish positions by buying puts and selling calls. After 11:49 am, it reversed its morning trades, sending the index into a tailspin and locking in massive profits. Directional trades In another strategy labelled 'extended marking the close", Jane Street was found to have made aggressive directional trades in the final 30-60 minutes of trading to engineer the index closing level. This was key since settlement prices for options are derived from the day's close. In a particularly serious instance, on 15 May, 2025—despite receiving a prior caution from the National Stock Exchange (NSE)—the same pattern re-emerged, this time on Nifty expiry. Sebi noted this was a "cynical violation of the caution letter issued to the JS Group on February 6, 2025." Forensic analysis The investigation, which began in April 2024 after foreign media reports flagged global litigation involving Jane Street's trading strategies, focused on derivatives expiry-day trades. Forensic analysis of timestamps, order placement vs. last traded price, and gross traded values revealed patterns closely tied to its options exposures. According to Sebi, this indicated a calculated design to manipulate index levels. Legal experts say the burden now shifts to Sebi to prove manipulative intent. 'Large, aggressive, or even dominant trading strategies are not per se unlawful unless they are deceptive or fraudulent. Sebi's case relies on patterns and price impact rather than direct evidence of deception, which could face scrutiny. This matter could set an important precedent for how Indian law treats complex algorithmic strategies in the derivatives market," said Sumit Agrawal, founder of Regstreet Law Advisors and a former Sebi official. Agarwal added that if contested, Jane Street could plausibly argue that its trades were part of legitimate algorithmic strategies used for hedging and liquidity provision, not manipulation. 'The trades were executed transparently through the exchange and may have caused market impact due to scale, but impact alone isn't unlawful under Indian securities law", he said. Major reset Jayesh H., co-founder of Juris Corp, added, 'While it can appear as one-off, that would be a mistake. If the preliminary assessment turns out to be correct, then there needs to be a major reset and on all sides... Going back in time, the recommendations of L.C. Gupta should be remembered… small retail investors [were] to be kept out." A Sebi official said on the condition of anonymity that the interim order is not a show cause notice, and it clearly indicates that investigations into Jane Street will continue. "This interim order has only looked at the 18 major days of prima facie Bank Nifty index manipulation on expiry day… Investigations into other expiry days, other indices (including across exchanges), and other potential patterns besides the two highlighted in the order will need to continue." There should not be any major market impact from this enforcement action, the official added. "In any case, delta-based (future equivalent) limits are now in place in index options to curtail excessive risk taking without impacting regular participants." Enforcement Better enforcement of existing regulations can pave the way for optimal regulation, the official said. 'On the flip side, more regulations cannot make up for poor enforcement. We will continue to monitor Indian F&O markets." The order, authored by Sebi whole-time member Ananth Narayan G, mandated Jane Street to close all open derivative options in three months. Exchanges have been asked to supervise the group's trading, which will commence after it deposits alleged illegal gains. Market experts appear to have mixed views on the implications of the Sebi action on the US trading firm. 'You've got to hand it to Sebi for going after Jane Street. If the allegations are true, it's blatant market manipulation," said Zerodha founder Nithin Kamath on X. He added, though, that prop trading firms like Jane Street accounted for nearly 50% of options trading volumes, and if they pulled back—which seems likely—retail activity of around 35% could take a hit. 'So this could be bad news for both exchanges and brokers," Kamath said. Higher volumes? However, a UAE-based trader active in Indian markets countered this view, saying volumes could actually rise. 'The impact of the Sebi clampdown on Jane Street's manipulation will only lead to an increase in volumes," said Mayank Bansal, president at a UAE-based hedge fund. 'Many traders stayed out of the Indian markets over the past 12 months, knowing that markets were being rigged massively by Jane Street on expiry day. Now that Jane Street has been barred… the volumes… will actually increase as traders staying out will come back in again."Jane Street is largely a market maker in other markets where it operates. Here, instead of providing two-way liquidity, it was taking large directional exposure via options, and then manipulating the underlying to benefit from them. NSE's premium turnover in index options—a key metric for active trading—averaged ₹47,836 crore per day in Q1 FY26. That's down 24% year-on-year from ₹63,208 crore, but up 10% from the previous quarter. The year-on-year fall is attributed to Sebi's tighter rules introduced late last year, which increased the cost to trade and limited weekly option expiries to one per exchange. BSE holds a little over 20% share of the options market.
