Shares of Angel One fell sharply on Sunday, February 1, mirroring weakness across broking and exchange-linked stocks after Union Budget 2026 confirmed a steep hike in Securities Transaction Tax (STT) on futures trading.
The decline follows the government’s decision to raise STT on futures contracts from 0.02% to 0.05%, significantly increasing transaction costs for derivatives traders. The move directly impacts retail traders, high-frequency traders, and algorithmic trading strategies that rely on frequent futures transactions.
Higher STT reduces the attractiveness of leveraged trades, raising concerns that F&O trading volumes could decline in the near term.
Angel One derives a substantial portion of its revenues from derivatives trading volumes. Any slowdown in F&O activity can directly impact brokerage income, order flow, and overall trading-led revenues. The sharp STT hike has heightened fears of reduced participation by active retail traders, a key customer segment for online brokers.
Broking stocks across the board came under pressure as markets priced in the potential short-term hit to volumes and margins following the Budget announcement.
The market reaction reflects concerns over immediate earnings sensitivity to derivatives volumes, rather than long-term structural issues. Investors are now watching how trading activity evolves in the coming sessions and whether higher transaction costs materially alter retail participation patterns.
For now, Angel One shares remain under pressure as markets digest the implications of the Budget’s derivatives tax changes on broking businesses.
