Global brokerage Citigroup said the recent increase in Securities Transaction Tax (STT) is likely to act as a near-term sentiment overhang for the capital markets segment, though the longer-term behavioural impact is expected to remain limited.
According to Citigroup, STT on futures has been raised to 0.05%, while STT on options premium and exercise has been increased to 0.15%. These changes will come into effect from April 2026.
The brokerage noted that the tax hike could lead to a marginal decline in futures and options (F&O) trading volumes in the near term. However, Citigroup said past instances of STT hikes have had a muted impact on overall options turnover, suggesting limited long-term changes in trading behaviour.
On the stock front, Citigroup highlighted that Angel One and Groww could face mild topline pressure due to their relatively higher exposure to F&O trading. In contrast, the brokerage noted that the impact is expected to be minimal for other players such as Nuvama.
Disclaimer: This article is based solely on the brokerage inputs provided. The views expressed are those of the brokerage and do not constitute investment advice or recommendations by the publication.
