2 February 2026 (Navroze Bureau) : Shares of BSE Ltd and Angel One staged a recovery on Monday after witnessing a sharp sell-off on Sunday, while Groww continued to remain under pressure, underperforming its peers. The contrasting movement in these capital market-linked stocks reflects cautious investor sentiment following recent policy developments that have raised concerns about trading volumes and revenue growth.
What Triggered the Sell-Off
The heavy selling seen on Sunday was largely driven by concerns over increased costs in the derivatives segment after changes in the Securities Transaction Tax (STT) announced in the latest Union Budget. The higher STT on futures and options trades led investors to reassess the outlook for exchanges and brokerage firms, whose revenues are closely tied to trading activity, particularly in the derivatives market.
As a result, stocks linked to capital markets faced intense selling pressure, with investors factoring in the possibility of reduced trading volumes and margin compression in the near to medium term.
BSE and Angel One Rebound
On Monday, BSE and Angel One shares recovered a part of their losses as bargain-hunting emerged after the steep decline. Market participants noted that the earlier sell-off appeared overdone, prompting some investors to re-enter these stocks at lower levels.
BSE’s recovery was supported by expectations that, despite near-term volatility, its diversified revenue streams and strong position in cash market trading could help cushion the impact of higher transaction costs. Similarly, Angel One saw buying interest on the back of its established client base and technology-driven platform, which investors believe may help the brokerage adapt to changing market conditions.
Analysts said the rebound does not necessarily signal a full reversal but indicates short-term stabilization after panic-driven selling. “Such stocks tend to be highly sensitive to regulatory or tax-related changes. Once the initial shock settles, selective buying usually follows,” a market expert noted.
Groww Continues to Lag
In contrast, Groww shares continued to underperform, failing to participate meaningfully in the broader recovery seen in other capital market stocks. Investor sentiment around Groww remains cautious due to concerns about its business model and exposure to derivatives trading activity.
Market participants believe that discount brokerage platforms and trading-focused firms may face greater pressure if higher costs lead to a slowdown in futures and options participation. This has raised questions about revenue sustainability and growth momentum for such platforms in a more expensive trading environment.
The continued weakness in Groww suggests that investors are taking a more selective approach within the sector, favoring companies perceived to have stronger balance sheets, diversified income streams, or better resilience to regulatory changes.
Sector-Wide Impact
The recent volatility highlights how sensitive capital market stocks are to policy changes. Exchanges and brokerages depend heavily on trading volumes, and any measure that raises transaction costs can have a direct impact on earnings expectations.
While some experts believe that the market will gradually adjust to the new tax structure, others warn that sustained higher costs could alter trading behavior, especially among retail and high-frequency traders. This, in turn, could influence revenues for brokers and exchanges over the coming quarters.
Broader Market Sentiment
The movement in these stocks also mirrors broader caution in equity markets, where investors are closely watching policy signals, interest rate trends, and global cues. Although Monday’s recovery in BSE and Angel One brought some relief, the overall sentiment remains guarded.
Analysts advise investors to remain selective and focus on fundamentals rather than short-term price movements. “The sector may continue to see volatility as the market digests the implications of higher transaction taxes. Stock-specific factors will play a bigger role going forward,” said a market strategist.
Outlook Ahead
In the near term, trading volumes, management commentary, and future policy clarity are expected to guide the performance of capital market stocks. BSE and Angel One’s ability to sustain their recovery will depend on whether trading activity stabilizes and investor confidence returns.
For Groww, the key challenge will be addressing concerns around growth and profitability in a changing regulatory environment. Until there is greater clarity, the stock may continue to face pressure relative to its peers.
Overall, the divergent performance underscores a shift from broad-based selling to selective recovery, as investors reassess risks and opportunities within the capital markets space.
Summary:
BSE and Angel One shares recovered after a sharp Sunday sell-off driven by higher derivatives costs, while Groww continued to underperform as investors remained cautious about trading volumes and revenue prospects.