July 5: SEBI screams market manipulation, Big-beautiful-bill passes

Good Morning 🇮🇳 

In a move that had the pun-gods slow clapping, hawala heroes Lalit Modi and Vijay Mallya were recorded signing the lyrics to “I Did It My Way” by Frank Sinatra at a gala hosted by the former. Not sure who selected the song but well done we say. Now only if the Police could join this karaoke party with our favourite number “Aaja meri gaadi mein baeth ja”.

Now, let’s get into the dispatch! 🚀 

Today’s reading time is 5.5 mins.

Market Fraud 🚨
SEBI vs Jane Street shakes the market

In a real life Billions parallel - the markets were shook yesterday when SEBI accused global trading powerhouse Jane Street Group of market manipulation and barred it from operating in Indian markets. The regulator asked the company to deposit assets worth ₹4,843 crore ($567 million), citing illegal means. Jane Street, however, has disputed SEBI’s findings and may challenge the interim order.

Let’s talk numbers: Jane Street earned ₹36,502 crore across Indian market segments between January 2023 and March 2025. On its most profitable day in January 2024, the firm reportedly pocketed a staggering ₹735 crore in a single trading session. Impressive? Sure. Fraud? 100% according to SEBI, which believes there’s more than just clever trading behind these figures.

Dirty tricks? Jane Street apparently manipulated the Bank Nifty index by engaging in ‘mark the close’ tactics, a manipulative trick used to boost stock prices in the morning, then holding large short positions to eventually sell aggressively and profit from the dip. The investigation tracked Jane Street’s trading patterns for more than two years, to uncover this sinister pattern. According to the regulator, the National Stock Exchange (NSE) had issued an explicit advisory to the firm in February 2025.

What’s next? The trading giant disputes the findings and will supposedly further engage with the regulator. SEBI has given the company a window of 21 days to file a complaint or objection to the interim order. Additionally, Jane Street also has the option to challenge the order judicially via the Securities Appellate Tribunal.

Big picture: This comes at a time when global trading firms such as Citadel Securities are strongly increasing presence in India - the world’s largest derivative market. Shares of stockbroking firms such as Nuvama Wealth and Angel One, witnessed a sharp decline on Friday. SEBI will need all the help it can get to keep a watch on these wily hedge funds.

BUSINESS INDIA
DHANDA HAI YEH!

• Defence fortification continues: India is significantly strengthening its defence, approving over ₹1 lakh crore for acquisition projects, including 12 minesweepers, new quick-reaction missile systems, and 3 spy planes. Additionally, it is launching a three-year, $234 million drone incentive program to boost domestic manufacturing, aiming for 40% indigenous component production by FY28.  

• Copper drive: India, the world's 2nd-biggest refined copper importer, plans to attract foreign firms to build 4-5 million tons of new smelting capacity. It seeks overseas mining ties in an attempt to cut its import dependency (currently at 97%) by 2047. 

• Fintech: India's fintech sector saw funding plunge to a five-year low of $889 million in H1 2025, a 26% drop from H2 2024, with a 44% decline in the number of funding rounds. However, defying the trend, InCred Finance secured ₹400 crore ($46.8 million) debt funding, led by Morgan Stanley’s ₹300 crore, boosting its pre-IPO efforts targeting ₹4,000-5,000 crore.    

• RBI's big auction: RBI held an underwriting auction on July 4 for ₹32,000 crore government securities, which include a new Government Security (GS) maturing in 2040 and a re-issue of the 6.90% GS maturing in 2065, each carrying a notified amount of ₹16,000 crore. It ensures smooth government fundraising via primary dealers. 

WORLD: BUSINESS AND GEOPOLITICS 🌍
‘Big Beautiful Bill’ blessed by US congress

Donald Trump's ‘big beautiful’ bill that proposed sweeping tax cuts and spending narrowly passed through the Republican controlled House of Representatives in the US Congress with a 218-214 vote. This marks a significant victory for Trump, with the White House announcing that the Republican President will sign it into law on July 4 (American Independence Day).

Major talking points?

• Makes 2017 Tax cuts permanent while delivering on new tax breaks promised during his 2024 campaign

• Introduces a big cut in Medicaid (the government’s health program for low and disabled Americans) which could result in nearly 12 million people losing coverage due to new work requirements.

• Adds $3.4 trillion to the nation's existing $36.2 trillion debt

• Increases US military budget by $150 billion

• Hardline immigration stance (more below)

Hardcore stance on immigration: One of the highlights of the bill is its crackdown on Immigration. The bill provides $46 billion to finally ‘build that wall’, $45 billion to expand immigrant detention centres, with an additional $30 billion to boost staffing and training at Immigration and Customs Enforcement.

Big beautiful bill’s bromance break-up (we’re very proud of this one): This controversial bill has not been short of its critics. In one of the biggest political bromance breakups, Elon Musk heavily criticised the bill, threatening to unseat lawmakers who supported it, while floating the idea of his own political party. This bill is bound to have widespread repercussions, and it will be interesting to see how it shapes geopolitical ties and the global landscape.

WORLD: BUSINESS AND GEOPOLITICS 🌍
KYA CHAL RAHA HAI?

• Cloudflare beta-launches AI paywall: Cloudflare (an internet infrastructure company that powers ~20% of all websites) has beta-launched a new “Pay Per Crawl” marketplace which empowers publishers to either block, allow, or charge AI scrapers for access to the website’s content. This is a big change which could kick off a potential shift with AI models finally having to pay creators for scraped content that is used to train models.

• Russia recognises Taliban: Russia became the first country to formally recognise Afghanistan’s Taliban government, accepting the credentials of a new ambassador of Afghanistan. Also, Moscow stated to help Kabul on security, counterterrorism and combating drug crime.  

• China’s decreasing fertility rate: China is offering ₹42,000 a year for a child born, for three years, to combat its declining birth rate. The push comes amid China’s population shrinking for a third year, with births at 9.54 million in 2024, 50% of what it was in 2016 when the one-child policy ended. 

• French police slashed migrant boat: French police slashed an overloaded migrant boat off Boulogne, leading to speculation of new tactics to stop UK crossings. While the UK welcomed this action, French police clarified they've adopted no new strategies, still prioritising safety. 

Aur Batao: News from across India 📰 

• China tracking on Op Sindoor: While at an event in Delhi, Deputy Chief of Army Staff - Lt Gen. Singh revealed that China gave Pakistan real-time intel on Indian troop movements during Op Sindoor. He also mentioned that 81% of Pakistan’s military hardware is Chinese, and that China is able to test its weapons against other weapons - defacto using Pakistan as a live lab.

• Delhi puts brakes on fuel ban for old vehicles:  Delhi has scrapped the plan to target 62 lakhs ‘end of life’ vehicles (ELVs), imposing a fuel ban and authorizing their impounding from July 1 due to to public pressure, and systemic challenges.  

• Monsoon crisis hits Himachal: Cloudbursts and floods have killed at least 69 in Himachal, with over ₹400 crore in damages. Mandi is understood to be the worst-hit region. IMD warns of more rain and landslides till July 7. In addition to that, the Union Government has declared the entire state of Himachal Pradesh as a “Civil Defence Town” with 70,000 locals to be trained for disaster relief.

Sports and Entertainment

• Gill’s record-breaking double century: Newly appointed Indian test captain Shubman Gill broke multiple records with his blistering knock of 269 runs against England in the second test match of the Anderson-Tendulkar Trophy. This marks the highest score by an Indian captain as well as the highest score by an Indian batter in England.

• Gukesh dominates Carlsen: Current world Chess champion, D Gukesh, outwitted world number 1 Magnus Carlsen yet again to lead the Super United Rapid and Blitz Chess Tournament. There was unfortunately no table banging.  

• India’s Olympic concerns: India is trying hard to host the Olympics 2036 in Ahmedabad, but the IOC is concerned over rising governance issues and doping violations in India, with 213 positive cases in 2023.  

• Pak Hockey team to arrive in India: India's Sports Ministry cleared Pakistan’s hockey teams to travel to India for the Asia Cup and Junior World Cup in November and December, adhering to Olympic charter norms despite ongoing tensions. 

• India vs Thailand: India to face Thailand in a "winner-take-all" encounter of the AFC Women's Asian Cup Qualifier on July 5th. Both teams have navigated their campaigns with impressive results, making this encounter a high-stakes match for qualification.  

NOTE FROM THE DESI DISPATCH TEAM

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