BSE, NSE Investors Lose ₹1.4 Lakh Crore Amid Jane Street Scandal, F&O Mess Clean-Up

Shareholders of BSE and NSE have altogether lost about ₹1.4 lakh crore in market capitalisation in the last month following the Jane Street mayhem, ongoing regulatory cleanup of the F&O mess, and declining derivatives turnover. BSE stocks have entered into bear territory, while NSE has declined by over 20%.

The negativity in the equity markets exacerbated after SEBI barred US quant trading firm Jane Street from participating in the securities market. It froze assets worth ₹4,840 crore earned through unlawful gains.

BSE shares have fallen by 22% from their June 10 high of ₹3,030 to ₹2,376. NSE shares tumbled 18% from their June 21 high of ₹2,590 to ₹2,125, losing about 1.15 lakh crore in market capitalisation, data by WWIPL said.

Market analysts have started downgrading the exchange stocks. IIFL Capital downgraded BSE to ADD, citing near-term volume headwinds. “The current uncertainty in the market (ban on Jane Street + possible scrutiny on other players + risk of more regulations amid rising retail losses) would weigh on near-term Exchange volumes,” the brokerage said.

In the previous month, Motilal Oswal downgraded the stock to neutral citing concerns over a potential market share loss following the shift in weekly contract expiries.

“BSE has declined around 22% from the record peak, and last fortnight's sustained downtrend has given the feeling that the stock has entered a full fledged bear trend,” said Anand James, Chief Market Strategist at Geojit Investments Limited.

Jane Street’s ban had a stark impact on the stock market. On the first expiry of Nifty weekly contracts since the prohibition, NSE’s turnover declined by 21% against the previous day’s expiry. Index options fell to ₹472.5 trillion, down from ₹601 trillion on July 3. Total premium turnover on NSE hits its lowest since mid-March for an expiry day, leading to 40% decline against the year’s average.

During the first 8 trading sessions of July, BSE's Option Premium ADTO fell by 25% to ₹105 billion against June’s average. IIFL Capital slashed its volume assumption by 6-8%, leading to a 3-5% EPS cut over FY26-28, on top of a 4-5% EPS cut done in June 2025.

Notably, SEBI’s May 26 landmark circular mandating changes in expiry days for equity derivatives contracts has added to the pressure. The regulator said that exchanges must limit expiry to just Tuesdays or Thursdays. NSE shifted its equity derivatives expiry from Thursday to Tuesday effective September 1, 2025, while BSE moved to Thursday from its previous Tuesday slot.

The broader market Option Premium ADTO fell 19% month-on-month to ₹510 billion in July, down 28% versus first quarter FY26.

“We believe weakness in volume can sustain in short term due to recent regulatory changes (ban on Jane Street + other members may also be under scrutiny),” IIFL Capital noted, highlighting that volumes through colocation servers, extensively used by high-frequency traders, account for 55-60% of derivative volumes.

Jefferies expects Jane Street's contribution to BSE at around 1% of turnover,suggesting limited direct impact on earnings. “A 100bps impact on our FY26 premium estimates would impact EPS by ~60-70bps,” the brokerage said.

“We downgrade the stock to ADD given near-term uncertainty, which would weigh on both earnings and valuations,” IIFL Capital said, though it maintained a positive bias from long-term horizon given potential for 15-20% earnings upgrade.