ET NEWS

Mumbai: Trading in equity derivatives is set to become more expensive from April 1, as a set of measures by the government and the central bank aimed at moderating speculation are set to kick in. The steps - including higher taxes on futures and options trading and tighter lending norms for brokers - will raise trading costs and squeeze volumes. The government, in its Budget 2026-27, has raised the securities transaction tax (STT) on futures to 0.05% from 0.02%, a 150% increase. On options, STT on premiums and exercise of options will both rise to 0.15% from 0.10% and 0.125%. RBI's tighter lending norms for capital market intermediaries, including brokers, requiring all credit facilities to be fully secured with 100% collateral, will also take effect on Wednesday. "While the STT hike and stricter RBI lending norms aim to curb speculative intensity, such a broad-based approach inevitably raises entry barriers and increases friction across the entire ecosystem," said Ankur Jhaveri, MD & CEO - Institutional Equities, JM Financial Institutional Securities. Volumes in equity derivatives could drop 15-20%, increasing impact costs in the cash market, according to him. Brokers collect STT from clients soon after the trade, making it an upfront cost for traders, regardless of the profit or losses. "We expect the biggest impact to be on retail traders following the STT hikes," said Dhiraj Relli, managing director and chief executive officer at HDFC Securities. "Derivatives volumes could drop around 20% for retail participants, and closer to 30% when you include proprietary traders." The futures segment is likely to see sharper cuts in trading activity compared to options on account of the STT increase, said brokers. This tax on futures trade is levied on the transaction value, increasing the outgo. "The higher tax is expected to increase trading, arbitrage and hedging costs which may impact to the overall cost and liquity in derivatives," said Roop Bhootra, whole-time director, Anand Rathi Share and Stock Brokers. Prop Traders RBI's tighter norms are aimed at bringing down banks' loans to brokers and proprietary traders, increasing their cost of capital. Proprietary trading desks rely heavily on bank-backed funding and guarantees to take higher trading exposures.“RBI regulations will reduce leverage for proprietary traders, who will now need 100% collateral for bank guarantees, and raise the cost of capital for brokers due to full cash margin requirements for intraday funding,” said Bhootra. Local proprietary and highfrequency trading firms — key contributors to market volumes — face the highest direct impact, said Jhaveri. For these traders, higher STT and reduced leverage are a double whammy, according to Relli. “This could reduce volatility on expiry days when such players are typically most active,” he said

Mumbai: Banks believe mark-to-market (MTM) treasury losses are expected to be significantly larger than estimated due to a sharp rise in 10-year yield, which crossed the psychological mark of 7% on Monday - its highest level since 2024. The 10-year yield closed at 7.03% on Monday, the last trading day of this fiscal year, versus its previous close of 6.94%. The money market will be closed on Tuesday due to Mahavir Jayanti. The yield jumped 37 bps in March, the biggest monthly move since February 2017. 129913805 The sharp rise in yields comes amid rupee crossing the 95-mark prompting RBI to step in to support the local currency. The last day of the fiscal year has seen rupee and bond movement in directions that were widely unexpected by treasury heads of commercial banks. "The fear around what comes next is so high that traders don't want to hold on to any positions right now. It doesn't look like the war will end anytime soon or that the shock will reverse quickly, so markets may have to start building positions around this new reality," said Alok Singh, head of treasury at CSB Bank. The jump in yields comes despite a lower-than-expected borrowing calendar. RBI on Friday said that it plans to issue ₹8.2 lakh crore of government securities in the first half of FY27, below market expectations of ₹8.53-8.85 lakh crore. "We will now have to watch out for the g-sec auction on Thursday. There we will be able to gauge what yield levels are comfortable for RBI depending on which bids it rejects and which it accepts," said a bond trader at a primary dealership. Market participants are now gearing up for supply in the next financial year, which is expected to push yields even higher, especially now that the 7% level has been breached. Investors are also factoring in a prolonged West Asia conflict and the risk of further escalation, assessing its potential to weigh on growth while fuelling inflation in a net energy importer like India. "Many stop losses were hit as yields crossed 7%. There are also fears of a potential rate hike as traders are now factoring in a prolonged war as the base case," said another bond trader at a private sector bank. Overnight call rate also jumped on March 30, the last trading day of this FY to 6.92% versus 5.46% previously. The call rate rose as banks were reluctant to lend funds on the last day of the fiscal year, traders said. TREPS rate jumped too, closing at 6.16% versus 5.44% previously, CCIL data showed. To inject liquidity into the banking system and offset the shortage of lending in overnight markets, the RBI conducted two variable rate repo (VRR) auctions of ₹50,000 crore each.

U.S. stocks ended mostly lower on Monday as U.S. President Donald Trump's new warning to Tehran and a widening of the Middle East war offset optimism over his comments on U.S. discussions with Iran. Trump said the U.S. was in serious discussions with a "more reasonable regime" to end the war, but ‌repeated his threat ⁠to open the ⁠Strait of Hormuz or risk U.S. attacks on Iranian oil wells and power plants. Iran described U.S. peace proposals as unrealistic. Investors have been focused on how oil prices will impact the global economy after they shot up since the start of the war. "The administration continues to send mixed messages," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey. "When the messages seem good, to the extent they are believed, it helps the market. If something they ⁠say implies ‌a more aggressive approach, the market sells off." At the same time the conflict has been escalating. Yemen's Iran-backed Houthi militia entered the war over the weekend. All three of ⁠the major indexes started the day higher after logging sharp declines in the previous session. Since the war started, the Dow, the Nasdaq and the small-cap Russell 2000 have all confirmed correction territory, ending 10% lower from their record-high closes. According to preliminary data, the S&P 500 lost 25.52 points, or 0.40%, to end at 6,343.33 points, while the Nasdaq Composite lost 153.16 points, or 0.73%, to 20,795.20. The Dow Jones Industrial Average rose 53.27 points, or 0.12%, to 45,219.91. Comments from Federal Reserve Chair Jerome Powell gave some support to stocks. Powell said ‌longer-term inflation expectations appear to be holding despite the current energy shock, and the Fed does not yet need to make a decision on how to react to the latest troubles. Both U.S. crude oil ⁠and Brent settled higher. Money market participants have priced out any easing from the Federal Reserve this year, compared with two cuts expected before the war began, per the CME Group's FedWatch Tool. The S&P 500 energy index was down slightly and technology stocks were among the biggest drag on the S&P 500. On the flip side, the financial index gained after the U.S. Department of Labor issued long-awaited guidelines intended to clarify how trustees can add alternative assets to 401(k) retirement plans. Shares of asset managers climbed with Blackstone and KKR both higher.

New Delhi: Deloitte has lost senior executives in recent weeks amidst an influx of dealmakers from rival firms that changed its approach to the mergers and acquisitions advisory business, according to people familiar with the matter.Executives who quit include Rajesh Aggarwal, head of debt advisory, Ruchi Sarna, national head of consumer investment banking, and Suresh Atal, a senior partner in transaction advisory, multiple sources said.Their departure could lead to a movement of more executives as typically such moves at professional services firms trigger team movements, sources added.Aggarwal and Atal are likely to move to PwC while Sarna is also expected to move to a rival outfit.PwC recently named Anmol Bhandari, a former Deloitte executive, as head of its transaction services vertical.Deloitte has shifted its focus in mergers and acquisitions advisory to deals above $250 million in value after the firm brought in Rohit Berry from KPMG as president of that vertical about two years ago. Berry was followed by two other senior executives from KPMG, Vivek Gupta and Manish Aggarwal.Over 200 executives moved from KPMG to Deloitte following Berry's move.Deloitte and PwC did not respond to ET's queries."They (Deloitte) are looking to fill the gap in debt advisory. They are in the market to hire 6-9 partners," said a corporate finance head at an infrastructure company who did not wish to be identified.

The Reserve Bank of India on Monday deferred the implementation of acquisition finance guidelines by another three months to July 1 this year, following stakeholder feedback.The central bank stated that it has also revised the "Amendment Directions on Capital Market Exposures" framework, first announced on February 13.The RBI had come out with the guidelines after a consultative process, allowing domestic lenders to fund acquisitions."On a review, based on further discussions with the stakeholders and on a review, it has been decided to extend the effective date of the said Amendment Directions by three months to July 1, 2026," the central bank said on its website.The tweaks announced on Monday include the definition of acquisition finance, which has been modified to include mergers and amalgamations, limiting the lending for acquiring a non-financial entity alone and allowing the acquiring company to avail acquisition finance for on-lending to a subsidiary incorporated in India or overseas for the acquisition of a target company.Refinance of acquisition finance can take place only when the acquisition finance has been concluded in all aspects and by the establishment of control of the target company by the acquiring company, the RBI clarified, adding that such refinance should only be used to retire the acquisition finance debt.It also said that a corporate guarantee from the acquiring company shall be required in cases of acquisition finance extended to a subsidiary or a special purpose vehicle of the acquiring company.Other objectives for issuing the guidelines had included rationalising the limits for lending by banks to individuals against shares, units of REITs, InvITs, etc. and putting in place a more principle-based framework for lending to capital market intermediaries (CMIs), it said.

Shares of Jio Financial Services and Bharat Heavy Electricals Limited (BHEL) witnessed block deals today. The stocks came under selling pressure on Friday even as block deals worth over Rs 93 crore were executed on the NSE involving global financial heavyweights.In Jio Financial Services, Morgan Stanley, through its arm Morgan Stanley Asia Singapore Pte, offloaded 26.75 lakh shares at Rs 232.55 apiece in a deal valued at Rs 62.29 crore. The entire stake was picked up by Goldman Sachs via its affiliate Goldman Sachs Bank Europe SE.The stock ended the session at Rs 224.45, down 3.48%. Despite the institutional activity, the counter has delivered muted returns of just 1.5% over the past year and continues to trade below its key technical levels, including the 50-day and 200-day simple moving averages of Rs 252 and Rs 295, respectively, indicating underlying weakness in trend.In a similar transaction, Goldman Sachs Bank Europe SE also acquired 12.35 lakh shares of Bharat Heavy Electricals (BHEL) at Rs 251 apiece, aggregating to around Rs 31 crore. The shares were sold by Morgan Stanley Asia Singapore.BHEL shares declined 3.57% to close at Rs 245.75. The stock has generated modest one-year returns of around 13.4% but is currently trading below its 50-day and 200-day moving averages of Rs 259 and Rs 254.8, respectively, suggesting continued pressure in the near term.A slew of block deals were also witnessed on the BSE in which French multinational bank BNP Paribas executed multiple block deals across counters including Siemens Energy India, GMR Airports, LG Electronics India and Max Healthcare Institute.In Siemens Energy India, BNP Paribas bought 1.69 lakh shares at Rs 2,565 apiece in a deal worth around Rs 43 crore. The shares were offloaded by Morgan Stanley Asia (Singapore). The stock, however, ended the day at Rs 2,569.65 on the BSE, down 2.26%.In another transaction, BNP Paribas acquired 36.29 lakh shares of GMR Airports at Rs 85.75 per share, amounting to Rs 31 crore. The seller was Copthall Mauritius Investment Limited. GMR Airports shares closed 5.53% lower at Rs 84.16 on the NSE.The foreign institution also picked up 2.47 lakh shares in LG Electronics India at Rs 1,455 per share in a deal valued at Rs 36 crore, with the counterparty being Goldman Sachs Bank Europe SE. The stock witnessed sharp selling pressure, ending 7.04% lower at Rs 1,427.90.In Max Healthcare Institute, BNP Paribas bought 5.88 lakh shares at Rs 969 apiece, aggregating to Rs 57 crore. The shares were sold by Citigroup Global Markets Singapore. The stock declined 1.55% to close at Rs 960 on the BSE.(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

French multinational bank BNP Paribas executed multiple block deals across counters including Siemens Energy India, GMR Airports, LG Electronics India and Max Healthcare Institute.In Siemens Energy India, BNP Paribas bought 1.69 lakh shares at Rs 2,565 apiece in a deal worth around Rs 43 crore. The shares were offloaded by Morgan Stanley Asia (Singapore). The stock, however, ended the day at Rs 2,569.65 on the BSE, down 2.26%.In another transaction, BNP Paribas acquired 36.29 lakh shares of GMR Airports at Rs 85.75 per share, amounting to Rs 31 crore. The seller was Copthall Mauritius Investment Limited. GMR Airports shares closed 5.53% lower at Rs 84.16 on the NSE.The foreign institution also picked up 2.47 lakh shares in LG Electronics India at Rs 1,455 per share in a deal valued at Rs 36 crore, with the counterparty being Goldman Sachs Bank Europe SE. The stock witnessed sharp selling pressure, ending 7.04% lower at Rs 1,427.90.Also read: Bulk deals: Mukul Agrawal sells stake in microcap laggard; Societe General buys Rs 76 crore stake in Sammaan CapitalIn Max Healthcare Institute, BNP Paribas bought 5.88 lakh shares at Rs 969 apiece, aggregating to Rs 57 crore. The shares were sold by Citigroup Global Markets Singapore. The stock declined 1.55% to close at Rs 960 on the BSE.Overall, despite the inflow of institutional interest through block deals, all four stocks ended the session in the red, reflecting broader market weakness and possible profit-booking at higher levels.The above stocks witnessed block deal action on the day markets witnessed significant selling pressure. Nifty's final session of FY26 ended in the deep red, settling 5% lower in the financial year ended March 31, 2026 while the BSE Sensex plunged 7% in the same period. The 50-stock index fell 2% on Monday to close at 22,331.40, recording its second successive fall, dragged by a sell-off across sectors. Heavyweight sectors like banking, auto, and IT contributed the largest share. Meanwhile, the volatility gauge India VIX ended at 27.89, up by 4.04% from the last closing.Also read: Investors lose Rs 1.34 lakh cr in FY26 as Sensex slumps 7%, Nifty ends 5% lower; PSU banks shine(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

XED Executive Development, the first company ​from India's low-tax ​GIFT City to launch an initial ​public offering, has withdrawn the IPO after delays with customer verification and weak market sentiments due to ‌the U.S.-Israeli ⁠war ⁠on Iran, it said on Monday.The global executive ​education platform said it hopes to tap the market ​at an appropriate time in the future.The withdrawal marks a setback for efforts to build ​India's Gujarat International Finance Tec-City, ⁠or GIFT ‌City, into a global ​capital markets ​hub competing with centres such as ⁠Singapore and Dubai.The roughly $12 million IPO ​of XED had received subscriptions for ​only about 5% of the shares on offer as of 7:15 p.m. on Monday, according to data from exchanges. The shares were to be listed on NSE International Exchange ‌and India International Exchange at GIFT City.The company had earlier extended the ​bidding ​deadline to Monday, ⁠citing delays in completing mandatory video-based customer verification for non-resident Indians and foreign investors amid disruptions ​linked to the conflict in the Middle East.The withdrawal also comes amid a global risk-off mood due to the widening conflict.($1 = 94.7150 Indian rupees)