Markets Tumble as Indian Regulator Bars Jane Street; BSE, Brokers Hit

Indian stock markets faced a sharp decline on July 4, 2025, following a decision by the Securities and Exchange Board of India (SEBI) to bar U.S.-based trading firm Jane Street from the country’s securities market. The regulator accused the firm of manipulating the Bank Nifty index through sophisticated derivative trading strategies, leading to unlawful gains of approximately ₹4,844 crore ($567 million) between January 2023 and March 2025. SEBI’s interim order also froze ₹48.4 billion in Jane Street’s accounts, restricting the firm from any securities transactions in India.

The decision triggered a sell-off, with shares of major stockbrokers like Angel One dropping 6% and the BSE exchange falling 7% in early trading. The Nifty 50 and BSE Sensex indices opened flat, reflecting investor caution as they assessed the impact of the ban alongside ongoing India-U.S. trade deal discussions. SEBI’s investigation revealed Jane Street’s alleged use of high-frequency trading to influence index prices, particularly on expiry days, causing significant losses for retail investors.

The regulator’s action signals a broader effort to curb manipulative practices in India’s derivatives market, the world’s largest by trading volume. While some market analysts suggest the impact on liquidity will be limited, the move has raised concerns about foreign investor confidence. Jane Street, which earned $4.3 billion in India over the past two years, has 21 days to respond to the order or appeal to the Securities Appellate Tribunal. Southasiandesk.com will keep readers updated on this developing story as markets navigate these regulatory changes.

Published in SouthAsianDesk, July 4th, 2025

Follow SouthAsianDesk on X, Instagram and Facebook for insights on business and current affairs from across South Asia.