There is no panic as such but there is more selling than buying happening currently on the counter of Nuvama Wealth (formerly Edelweiss). The stock, which had closed yesterday at Rs.8184.60, opened 1% lower at Rs.8100 and went down further to an intraday low at Rs.7618.35, down 7%.

The stock price has SEBI has barred Jane Street, one of the world’s largest proprietary trading firms and a key client of Nuvama’s institutional broking desk in India, from trading in Indian equity markets.

SEBI said that it would also be seizing Rs 4,840 crore from Jane Street, which it claimed is the total amount of unlawful gains made by the fund.

Jane Street is currently facing investigations in the U.S. and Europe related to market manipulation, high-frequency trading practices, and ETF arbitrage. As Jane Street’s Indian trading and execution partner, Nuvama facilitates a significant volume of their trades on domestic exchanges, especially in the cash and derivatives segments.

While there is no allegation or wrongdoing by Nuvama, the association has created a sentiment overhang, with markets pricing in;

• Potential regulatory tightening around algorithmic and institutional trading,
• Increased compliance scrutiny for brokers servicing global HFT firms,
• And the risk of temporary pullback in volumes or counterparty activity.

This unease has percolated down to the other capital market players, prominent amongst them being BSE, Angel One and CDSL.