Shares of Angel One Ltd are trading lower on Monday, February 2, extending pressure seen during Sunday’s special Budget session, as markets continue to react to the Union Budget 2026 hike in Securities Transaction Tax (STT) on derivatives.
What’s driving the decline?
The key overhang is the government’s decision to raise STT on futures from 0.02% to 0.05% and increase STT on options premium and exercise to 0.15%, effective April 2026. The move sharply lifts transaction costs for derivatives traders.
Because Angel One has significant exposure to F&O volumes, investors are factoring in:
- Lower derivatives activity due to higher trading costs
- Near-term pressure on broking revenues
- Softer sentiment across the capital markets value chain
Why higher STT hurts brokers
Higher STT makes frequent and leveraged trades more expensive, especially for:
- Retail derivatives traders
- High-frequency and algorithmic traders
This can curb order flow and turnover—key revenue drivers for discount brokerages like Angel One.
What brokerages are saying
- Citigroup said the STT hike is likely to act as a near-term sentiment overhang for capital markets stocks. While the long-term behavioural impact may be limited, Angel One and Groww could face mild topline pressure due to higher F&O exposure.
- Bernstein noted that derivatives will bear the brunt of the changes, adding that profitability for high-frequency trading may compress, softening sentiment for brokers tied to F&O activity.
Why the stock remains volatile
Even though brokerages expect the long-term impact to be manageable, the market is reacting to:
- The magnitude of the STT hike
- Uncertainty over how much F&O volumes may drop
- Earnings visibility ahead of the April 2026 implementation
Bottom line
Angel One shares are under pressure as investors reassess the near-term impact of higher STT on futures and options announced in Budget 2026. While brokerages see the issue as largely sentiment-driven with limited long-term fallout, stocks with higher derivatives exposure—like Angel One—are likely to remain volatile in the near term.
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