Stock market update: Nifty IT index falls 0.84%
ADVERTISEMENT Shares of Oracle Financial Services Software Ltd.(up 1.71 per cent), Persistent Systems Ltd.(up 0.81 per cent) and LTIMindtree Ltd.(up 0.28 per cent) ended the day as top gainers in the pack.
On the other hand, HCL Technologies Ltd.(down 2.13 per cent), Infosys Ltd.(down 1.44 per cent), MphasiS Ltd.(down 0.92 per cent), Wipro Ltd.(down 0.89 per cent) and Tech Mahindra Ltd.(down 0.75 per cent) finished as the top losers of the day.
The Nifty IT index closed 0.84 per cent down at 37972.35. Benchmark NSE Nifty50 index ended down 42.3 points at 25019.8, while the BSE Sensex stood down 200.15 points at 82330.59. Among the 50 stocks in the Nifty index, 25 ended in the green, while 25 closed in the red.
ADVERTISEMENT Shares of Vodafone Idea, YES Bank, Bharti Airtel, IRFC and IFCI were among the most traded shares on the NSE. Shares of Paras Defence, Stampede Cap(DVR), Mazagon Dock Ship, Kanpur Plastip and Wanbury Ltd hit their fresh 52-week highs in today's trade, while Wendt India, Career Point, BDR Buildcon, IndInfravit Trust and Ginni Filaments hit their fresh 52-week lows.
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The Hindu
7 hours ago
- The Hindu
'Jane Street has completely eroded confidence in the sanctity of Indian markets'
In late December 2024, portfolio manager Mayank Bansal,witnessed abnormalities in the options volumes of Nifty, smelled a rat and alerted market regulator, Securities & Exchange Board of India (SEBI), that a top U.S.-based proprietary firm was into foul play. The SEBI investigated the matter and passed a suo motu interim order on Thursday banning the errant trading firm and impounding ₹4,843 crore of unlawful gains. In an interview with The Hindu, Mr. Bansal, among the largest portfolio manages in the options space in Indian equities, explains what he saw and talks about what needs to be done to deter such manipulators. Edited excerpts: When did you realise/suspect Jane Street was gaming the system? The market getting manipulated was clear by February 2024 itself. The identity of the manipulator was not clear by then but the options market dynamics, when viewed by any seasoned options trader, made it evident that the market was getting manipulated. The needle of suspicion was always on Jane Street due to the disproportionate profit it was accumulating. There was also a widely-publicised court case in the U.S. between Jane Street and Millenium where Jane had sued two of its traders who had left to join Millenium for having taken a highly-valuable secret strategy with them. It was inadvertently revealed during the court proceedings that the strategy pertained to Indian options and that Jane Street had made ₹8,000 crore from it in calendar year 2023. What was the anomaly? The anomaly was that the manipulator would take heavy options positions in the derivatives market on options expiry days, which is very deep and then move the underlying cash segment (which is far less liquid) to benefit from those. This was done via 2 constructs of expiries that Jane Street created: Case 1-Quiet expiry: Here the manipulator would sell at the money options in bulk leading to them becoming dirt cheap as indicated by their implied volatilities. It would then maintain the index in a very tight range to pocket all the premium. Interestingly, the expiry too would be right on the strike where it had sold its options. Case 2-Volatile expiry: Here, it would buy a lot of options on one side (say calls for profiting massively on the upside). It would buy in bulk. The options would become exorbitantly expensive with no rationale (imagine a bottle of water selling for ₹1 lakh) and then in the latter hours of the day, it would execute a steep upmove in the cash market to profit heavily from all the calls it had bought. The extent of cheapness of options (in case 1) or expensiveness of options (in case 2) would be absolutely inexplicably bizzare. Imagine a real estate property selling for ₹100 in case 1 and a bottle of water selling for ₹1 lakh in case 2. What did you do then? In early 2024, when most experienced traders had identified the manipulation, they were largely just waiting for the regulator to step in and the manipulation to correct, but the extent of manipulation just kept increasing right through 2024, all the way upto December, at which point the Nifty was being made to move 2% casually. It is at this point (in late December) that I made the presentation and mailed it to SEBI. Mr. Ananth Narayan (SEBI Wholetime Member who has passed the interim order on Jane Street) was kind enough to immediately respond on it and ask me for an in-person presentation at SEBI Bhawan, BKC in Mumbai. Since then, I have been in touch with SEBI and have been sending emails whenever I have noticed continued anomalies. Now that SEBI has passed the interim order, are you satisfied? SEBI's interim order is just that as of now, an interim order. The unlawful gain of ₹4,843 crore that they have mentioned is from their in depth analysis of just 21 expiry days. They are yet to evaluate all the other expiry days. This unlawful gain is most likely a small fraction of the entire unlawful gains which would be revealed over time. In all likelihood, almost the entirely of ₹36,500 crore would be unlawfully got. This is because Jane Street, which typically serves as a market maker in other geographies was, in fact, not market making in India at all, but was instead taking large directional exposures via options, which is highly odd. In doing so (something which is not its forte), it was making 9x of the next largest guy (Optiver) in India in terms of profits. Also impounding just the unlawfully gotten gains does not alone serve as justice. The penalty should ideally be much higher. Imagine travelling ticketless in a train and the fine on being caught being just the price of the ticket. How significant is the action against the American firm? Having said this, the judgment by SEBI is an absolutely landmark judgement. There is no question about that. India has taken a stand and this judgment will have reverberations across trading desks in Hong Kong Singapore, London and New York. It's a wake up call for anyone targeting Indian markets as soft targets. SEBI has not confined itself to fining small inconsequential amounts like ₹50 lakh or ₹ 1 crore. And made a stark departure from some of its earlier mellow judgements. What harm Jane Street has done to Indian capital markets and retail investors? Jane Street has completely eroded confidence in the sanctity of Indian markets. India's premier indices were held hostage to the whims of one single unscrupulous player. This continued for 2 years. It is fairly humiliating and embarrassing for us as a country. The bulk of the losses were borne by the retail segment. It was revealed in a recently published SEBI report that of the 3 key segments (FPIs, prop desks (institutions), retail), only the retail segment was incurring heavy losses. These losses were to the tune of ₹55,000 crore in FY2024. This is roughly the entire pool of profits in the Indian derivatives segment. It has also been revealed that Jane Street made ₹20,000-₹25,000 crore in the same period. This is 40% of the entire pool of profits in Indian deviates. And almost all of it illegally amassed via manipulation, largely funded by Indian retail investors. What more should be done to get Jane Street to justice and create a deterrent for other such market manipulators? SEBI should pass an exemplary judgement to deter future manipulators who try to do something similar. Only last week, a new manipulator seems to have entered the fray at a smaller scale. To put a conclusive end to this, SEBI should ideally have limits on the exposure entities take (even if high). Or send a soft message across that high exposures would be investigated. This messaging and the consequent surveillance around this should be iron clad. Entities with disproportionate profits need to be routinely investigated to keep Indian markers free of such scourge. SEBI had in February 2024 floated a consultation paper proposing net and gross intraday and overnight delta exposure limits. This was refuted by a body called the FIA- an obscure body representing the very interests of firms like Jane Street. Sebi initially disregarded that representation but ultimately conceded.
Hans India
8 hours ago
- Hans India
Resumption of FII buying hinges on India-US trade deal, Q1 results
Mumbai: Foreign institutional investors (FIIs) have turned cautious this month ahead of the potential India-US trade deal announcement and upcoming Q1 FY26 results, analysts said on Saturday. FIIs were net buyers in the last two months, buying Rs 18,082 and Rs 8,466 worth of shares in May and June, respectively. However, the trend seems to have faded in the current month. The FII activity in early July indicates selling. In the first four days, FIIs were sellers every day, with a cumulative sell figure of Rs 5,772 crore. 'Resumption of FII buying will hinge on two things — one, if a trade deal happens between India and the US, that will be positive for markets and FII flows — and two, Q1 FY26 result indications," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. It will be good if the results show a recovery in earnings. If these factors are not met, it may affect the market and FII flows, he added. On Friday, FIIs offloaded Rs 8,277.90 crore, while domestic institutional investors sold shares worth Rs 11,334.32 crore, according to the latest data available on BSE. FIIs purchased shares in financials, cars and auto parts, and the oil and gas sector in the second half of June. They sold equities in power and capital goods companies. Profit booking is a trend in recent high-performing segments. Meanwhile, ahead of the pivotal July 9 US-India trade deadline, investors remain cautious, resulting in the Indian equity markets ending the week lower. The Sensex and the Nifty, two benchmark indices, fell 0.7 per cent each as profit booking following the recent rally and global uncertainty continued to taint overall market sentiment. The Sensex closed the week at 83,432.89. The Nifty ended the week at 25,461. The week began with a robust breakout for the indices, but worries about a potential hold-up in finalising trade agreements caused the momentum to wane.
Time of India
9 hours ago
- Time of India
High-Frequency Fibs: How SEBI can avoid getting JANED again
As the Business Head for The Times of India, I lead strategic initiatives and drive growth for one of the nation's most influential media organisations. My journalist friends believe I've crossed over to the proverbial dark side. Living on the edges of a dynamic newsroom, I dabble infrequently into these times that we live and believe in the spectatorial axiom – 'distance provides perspective'. LESS ... MORE Somewhere between Dalal Street and Wall Street, there's a humming server, a caffeinated quant, and an algorithm that can out-think morality in under a millisecond. Welcome to the world of high-frequency trading—where the trades are fast, the language is dense, and sometimes, the ethics don't catch the elevator. Enter Jane Street. A Wall Street darling and the stuff of trading folklore, Jane Street is known for its sharp mathematical minds, philosophical interview questions, and a fondness for speed. Not metaphorical speed. Literal, millisecond-level, market-reacting-before-you-even-blink speed. They're the Formula One team of finance—except they brought their high-octane engine to a crowded Indian autorickshaw lane and thought no one would notice. SEBI, to its credit, did. The regulator spotted something off. Jane Street, alongside affiliates, was making a suspicious number of trades in illiquid options on the Nifty index. Now, for the uninitiated: options are financial contracts that let you bet on the direction of a stock or index without actually owning it. Illiquid options are ones that don't get traded much—like obscure menu items no one orders. So when you suddenly see massive volumes in these usually quiet corners, it's like discovering a long queue outside a paan shop at midnight. Something's up. Jane Street was allegedly trading with itself—placing a buy order and then a matching sell order from another of its own accounts. It's a technique that creates the illusion of market activity, inflating volumes and nudging prices ever so slightly. Think of it as financial catfishing: it looks like real interest, but behind the screen, it's just one lonely algorithm flirting with itself. And why would anyone do that? Because if you can make a dead stock look lively, others might follow. Once real money starts chasing the artificial buzz, Jane Street could swoop in and make a tidy profit on the momentum it fabricated. It's not a glitch—it's a strategy. SEBI's investigation read like a digital whodunit. Precision-timed trades, mirroring volumes, patterns that repeated across months. The regulator even caught the same login IDs trading from the same IP addresses. The result? A ban. Jane Street and affiliates are now prohibited from India's markets, and they've been asked to cough up over ₹32 crore. But here's the thing: this isn't new. It's not even the first time someone tried this playbook in India. Remember the co-location scam from a few years ago? Traders got faster access to NSE servers and used that millisecond advantage to front-run the rest of the market. In financial terms, milliseconds matter—it's the time it takes for a trading algorithm to detect a price change and execute a profitable trade before anyone else can react. This is the core of high-frequency trading (HFT). It's not about luck or stock tips. It's about using powerful computers and advanced algorithms to trade thousands of times a second, often for tiny margins. Think of it like arbitrage on steroids: buying low and selling high, not across countries or currencies, but across time. Micro-time. Blink-and-you-miss-it time. And while HFT isn't illegal, it becomes problematic when firms use their speed to fake demand, mislead the market, or exploit loopholes. Which is what SEBI alleges Jane Street did. So, what now? SEBI needs to do more than just slap wrists. Surveillance systems have to go from passive dashboards to real-time, predictive engines. It's not enough to find the fraud after it's happened—regulators need to sniff the smoke before the fire spreads. Artificial intelligence isn't just for traders anymore; it's time regulators started using machine learning to detect patterns, flag anomalies, and ask uncomfortable questions before the money disappears. Then there's the code. Firms submit summaries of their trading strategies, but that's like reading a recipe and assuming you've tasted the dish. SEBI should demand actual access to the trading algorithms—scrutinising not just what a firm intends to do, but how it's written in code. Because in finance, intent often hides in the if-else clause. Banning a firm is easy. Banning the strategy is harder—but far more effective. If the playbook remains the same, a new firm with a new name will walk through the same door and run the same script. We don't need new villains in every act; we need better locks on the backstage door. And finally, a word on global hypocrisy. Jane Street is still active in the US and other markets. Unless regulators across borders talk to each other in real-time and share data, we're just playing regulatory hopscotch—where bad actors bounce from one jurisdiction to another, slightly tweaking their methods to dodge detection. At its heart, the Jane Street case is not just about one firm pushing the boundaries. It's about the integrity of our markets. Because every time a big player rigs the game and gets away with it, a small investor loses faith. The very idea of a fair, transparent market takes a hit. This time, SEBI caught it. But markets move fast. And fraud, like code, tends to auto-update. Let's just hope we don't read another order six months from now that begins, 'In the matter of trades executed in illiquid options…' and ends with '…thereby compromising the sanctity of the securities market.' Because when the same scam shows up with a new name and a faster server, it's not just fraud. It's déjà vu in high definition. Facebook Twitter Linkedin Email Disclaimer Views expressed above are the author's own.
