Jane Street Exit. Markets Ripple Effects ?

Markets Overview

It’s been a dull week in the Indian markets. The markets have been coming off a bit, but there haven’t been any major moves of note. It feels as though the market is simply resting, waiting for new cues—perhaps from the quarterly results, which will start pouring in over the next seven to ten days.

This week, the markets were hit by the SEBI order against Jane Street. While the immediate reaction was evident in capital market stocks taking a hit, the bigger question now revolves around potential second-order and third-order effects. The second-order concern is whether other large algo players, who provide significant liquidity, might withdraw from the Indian markets as a result of increased regulatory scrutiny. The third-order worry is whether the regulator could introduce even tighter regulations around the derivatives market. This could snowball into a meaningful situation for the broader markets. It’s a developing story that will likely unfold over the next month or so, and we’ll have to wait and watch how it pans out.

On the geopolitical front, things have been reasonably quiet. However, one brewing story remains the uncertainty around the India–US tariff agreement, which could still trigger volatility in the coming week depending on how negotiations progress.

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It’s been a dull week, but markets held steady. Attention now shifts to a possible India–US mini tariff deal and SEBI’s interim order against Jane Street, which may impact algorithmic trading. Upcoming cues include US tariff developments and the start of quarterly earnings next week.

Rebalance Update for the week