The Indian domestic indices Sensex and Nifty ended the special Budget trading session today (Sunday, Feb 1) in deep red. Investors reacted sharply to the announcements made by Finance Minister Nirmala Sitharaman in the Union Budget 2026.
The Sensex fell by 1,546.84 points to settle at 80,722.94, and the Nifty dropped 495.20 points, closing at 24,825.45. Similarly, the Nifty Bank settled at 58,304, down 2%.
The sell-off erased nearly Rs 10 lakh crore from investor wealth, with total market capitalisation falling to Rs 449.87 lakh crore from Rs 459.88 lakh crore.
Sectoral pain across the board
Most sectors ended the day in negative territory. Engineering stocks fell 3.5%, fertilisers lost 3.64%, and tobacco companies dipped 3.72%. Capital markets slid 3.77%, mining shares dropped 3.81%, and infrastructure stocks declined nearly 4%. PSU railways were down 4.62%, space-related companies fell 4.97%, and public sector banks slipped 5.29%. Defence companies lost 5.44%, shipping stocks dropped 6.03%, and non-ferrous metal stocks bore the brunt with an 8.16% fall.
Corporate groups also reflected this volatility in their market capitalisation. Smaller groups like Oswal, Patodia, Ruchi, and Avantha saw modest gains ranging from 1.59% to 4.36%.
However, larger groups faced sharp declines. IIFL Group fell 5.02%, TSF Group declined 5.27%, Pennar dropped 6.5%, Vedanta lost 6.66%, and Muthoot Group tumbled 8.57%.
STT hike triggers market nervousness
A major factor behind the steep decline was the Finance Minister’s announcement to increase the Securities Transaction Tax (STT) on futures and options.
The hike raised concerns about higher trading costs.
Investors also worried about its potential impact on flows in the commodity and capital markets.
IT stocks provided some relief
Although most sectors were under pressure in today’s trading session, IT stocks managed to buck the trend.
The sector saw modest gains, closing 0.6% higher. This came after the Finance Minister’s move to tax buyback proceeds as capital gains rather than as income.
Broader market under pressure
Small and midcap stocks also struggled, falling around 2% and 3% respectively.
The stock market will open again on Monday, February 2, and investors will be keeping an eye on how the market reacts after the Budget 2026 announcements.