New Delhi, April 27 -- The steep hike in securities transaction tax (STT) effective 1 April is beginning to eat into index futures and options volumes, analysts said. In 16 trading sessions on NSE through 24 April, the average daily turnover (ADT) of Nifty and Bank Nifty futures plunged 33% from a similar period in March to Rs.24,860 crore, a development analysts attribute primarily to the tax increase.

The Union budget for 2026-27 raised STT on equity futures by 150% to 0.05% on notional turnover, and on equity options by 50% to 0.15% on premium turnover.

The other factor seen to have a smaller impact is the uncertainty whipped up by the West Asia war. As indices swing wildly through the day, some retail investors stay away, while prop...